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Statement: February 2, 2006 Print this page
Docket Numbers: RM06-8 & AD05-7  

Commissioner Kelly's statement on long-term transmission rights NOPR

"This NOPR implements Congress' directive, under EPAct 2005 section 1233(b), requiring FERC to exercise its authority in a manner that facilitates the planning and expansion of transmission facilities to meet the reasonable needs of load-serving entities to satisfy their service obligations and enable them to secure firm transmission rights on a long-term basis for associated long-term power supply arrangements

"The NOPR parallels the statutory language by requiring that RTOs make long-term rights available sufficient to support load obligations served by long-term resources.

"I fully support this effort.

"I recognize that this effort may be complicated by the fact that the current RTO markets were not specifically designed to support long-term transmission rights or, for that matter, long-term power supply arrangements.

"Nevertheless, there is nothing inherently unreasonable about the business model of entities who prefer to rely on such long-term arrangements to serve their load.

"Essentially, they have chosen to trade off a certain amount economic efficiency for the enhanced reliability and price certainty of long-term arrangements.

"Provision of electricity is an important service, certainly important enough to justify such a trade-off for those who prefer to make it and are willing to pay the associated economic cost.

"Accordingly, I am pleased that Congress directed this action and I am pleased that we are carrying it out today.

"Many thanks to staff for its hard work preparing this document."

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