Feds Spike Innovative Power Plan Wwp Will Modify Proposal, Ask Agency To Reconsider

Federal regulators have spiked a Washington Water Power Co. program that allows its 30 largest customers to buy a portion of their power from other suppliers.

But company officials said Thursday they hope to submit a modified plan by the end of next week that would allow Direct Access Delivery Service (“DADS”) to continue.

DADS has been operating since September, shortly after regulators in Washington approved the experiment. Idaho quickly gave its approval. DADS participants may buy up to 30 percent of their electricity from someone other than WWP. They benefit from cheaper power - when they can find it - and a feel for how an open energy sales market may work in the future.

WWP, which has been an active player in the wholesale energy market, also gets more experience at the retail level.

Kelly Norwood, a senior rate accountant, said other companies now supply about 75 percent of the electrical load released by DADS, with other deals pending. The experiment will end Aug. 31, 1998.

Last month, WWP proposed a somewhat similar program for a limited number of residential customers.

Norwood said More Options for Power Service (“MOPS”), also will be modified to overcome concerns of the Federal Energy Regulatory Commission, which rejected the DADS filing last week.

The problem with both proposals is the way WWP separated its costs of delivering power to participating customers from the cost of the power obtained from other suppliers.

The utility grouped transmission, distribution and general expenses to come up with delivery charges of 1.5 cents in Washington and 1.3 cents in Idaho.

FERC requires utilities to separate transmission charges from other costs. For WWP, transmission cost represents less than .3 cents of the delivery charge.

The company asked the federal commission to defer taking jurisdiction in the case because the program is only a two-year test, but the five-member panel rejected that suggestion, and the tariffs.

Norwood said changes in the two programs should not affect their economics, or the value of the information the company learns from the experiments.

“We believe we will be able to continue,” he said.

But programs like DADS and MOPS will become more complex, putting a greater premium on information and education, he said.

Bill Gillis, a member of the Washington Utilities and Transportation Commission, said state regulators will want to be sure that WWP does not just shift costs from some customers to others to make DADS conform to federal requirements.

The action by FERC, he added, is just part of a nationwide process that will continue as deregulation spreads through the utility industry.

, DataTimes