Illinois' Newly-Adopted Sustainable Energy Plan Addresses Renewable Portfolios and Energy Efficiency

The Illinois Commerce Commission ("ICC") has adopted a sustainable energy plan modeled largely after the plan that Governor Rod Blagojevich proposed last February. Illinois joins a growing list of states whose regulatory agencies have implemented Renewable Portfolio Standards ("RPSs"), including neighbors Iowa, Minnesota and Wisconsin. In addition to the RPS outlined in the Plan, the new measure also contains a complementary Energy Efficiency Portfolio Standard ("EEPS"). The voluntary RPS asks that utility companies obtain two percent of their energy needs from renewable sources by 2006, and...

Supreme Court Decision Backs FCC Ruling Deregulating Broadband Cable Modem Providers that Bundle Telecommunication with Internet Access

In a decision noteworthy for its implicit encouragement of bundling traditional utility network service with competitive goods and services, contrary to the regulatory course charted in recent years for pipelines, local telephone exchanges and electric transmission grids, a divided (6-3) U.S. Supreme Court recently affirmed a Federal Communications Commission (FCC) declaratory rule that exempts from common-carrier regulation providers of broadband cable modem service because of the bundling of the telecommunications component of that service with internet applications. The majority decision...

IRS Finally Excludes from Taxable Income Funds that an Interconnecting Generator Advances for Transmission Network Upgrades

With the issuance of a recent Revenue Procedure , the Internal Revenue Service has eliminated a long running source of discord in the negotiation of new (or expanded) generator interconnections. The new Revenue Procedure creates a "safe harbor" that exempts from taxable income the payments that a generator, pursuant to FERC open-access rules, advances to an operator or owner of the transmission system to which it proposes to interconnect for needed upgrades to the transmission network. Many transmission utilities treated these advances as taxable income to the utility and would insist that a...

Open-Access Transmission Redux as New FERC Chair Jettisons Controversial Standard Market Design Championed by His Predecessor

In his new capacity as Chair of FERC, Joseph Kelliher has made good on his commitment to improving the existing open-access transmission rules that the agency adopted nearly ten years ago. In particular, with Kelliher at the helm, FERC appears committed to strengthening the anti-discrimination protections of existing regulation of interstate power transmission. At the same time, under Kelliher's leadership, FERC formally interred the Standard Market Design (SMD) Rulemaking proceeding that his predecessor Pat Wood rolled out on Wall Street three years ago, see Special Update (7/31/02), but...

PJM Test for Mitigating Scarcity Prices to Be Tested in Hearing

Engaging the nettlesome issue of scarcity, FERC convened an inquiry into whether the PJM Interconnection needs scarcity pricing and, if so, how a generator's potential to exercise market power during periods of scarcity should be mitigated. FERC's attention to these issues in PJM may herald for the MidAtlantic numerically exact mitigation price triggers, similar to what has already been established for other organized RTO and ISO markets. The current inquiry grows out of a proceeding in which FERC explored compensation due generating units needed to run for reliability reasons. In PJM,...

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