CHAPTER
FOUR: THREE MODELS TO ADDRESS NEBRASKA KEY ISSUES AND POTENTIAL
IMPACTS
4.0
Introduction
This
chapter introduces the three structural models utilized in this
study to examine the possible scope of change and the relative benefits
or impacts associated with introducing retail competition and undertaking
restructure of Nebraska's electric industry. The three models are
modified Current Structure, Limited Access, and Open Access. The
chapter examines the distribution, transmission, and generation
functions of each model and the key questions that arise from each
model. It also outlines potential impacts related to each model.
These are discussed in greater depth in later chapters.
Current
Structure of Nebraska's Electric Industry
Consumers
living in rural areas and the state's 536 cities and villages are
served exclusively by consumer-owned electric systems that have
entered into 395 electric service territory agreements. Map M4-1
shows the retail service areas in the state; ranging from the large
geographic territories in central and western Nebraska, to the small
geographic territories in the eastern part of the state. Retail
electric service is provided to these service territories by three
primary types of utilities: municipal electric systems, public power
districts, and rural cooperatives. Additional entities provide wholesale
power to these utilities and help to coordinate their operations..
In total there are 170 entities providing retail or wholesale electric
service in Nebraska:
121-Municipal
Systems
31-Public Power Districts
15-Rural Cooperatives (11 distribution and 4 G&T)
1-Public Power and Irrigation District
1-Municipal Joint Action Agency
1- Federal Agency (Western Area Power Administration)
The
170 entities serving Nebraska are organized under state statute,
by voluntary coordinating bodies and associations, and by contractual
relationships. Chart C4-1 shows the power flows and the interrelationships
of the various systems. Nebraska's three largest utilities (Nebraska
Public Power District, Omaha Public Power District, and the Lincoln
Electric System) serve about 60 percent of the state's retail customers.
The remaining 40 percent are served by a mix of smaller public power
districts, municipal systems, and rural electric cooperatives.
The
various power supply and transmission agencies are shown in Chart
4-1 on the upper-tier blocks and the various types of local
distribution companies on the lower-tier blocks. Chart 4-1 also
shows that some non-Nebraska agencies have power contract arrangements
with Nebraska utilities that provide service at retail.
As
indicated on Chart 4-1, the Nebraska Public Power District serves
most of the state's villages and towns: 207 at direct retail, 48
wholesale towns, 24 rural systems and Loup Public Power District.
In addition NPPD helps to supply some 50 cities that have their
own generation and 33 wholesale towns through the Municipal Energy
Agency of Nebraska. Omaha Public Power District, serves 46 towns
at direct retail, and 4 wholesale towns. Rushmore G&T serves
2 rural systems at wholesale. Tri-State G&T serves 10 rural
systems at wholesale and Lincoln Electric Systems service Lincoln
and Waverly.
Efficiencies
of operation of these systems is achieved through effective independent
operations and cooperative and contractual relationships.
Overview
of the Three Models
The
three models to address competitive pressures focus on retail structure
and assume that the pre-conditions at the wholesale level for a
viable wholesale market, functioning ISO or transco, and wholesale
prices competitive with Nebraska prices will be put in place. These
models are indicated in charts which outline the structural and
operational elements of utility service. The Current Structure Model
(Chart 4-2) is intended
to describe the status quo. It translates the power flow relationships
indicated in Chart 4-1 into a generic operational structure. The
Modified Current Structure Model (Chart
4-3) shows certain changes that may be considered to enhance
the Current Structure and address competitive pressures. The Limited
Access Model (Chart 4-4)
shows changes that would occur in an environment of retail competition
for a limited group of customers. The Open Access Model (Chart
4-5) shows changes in operations and structure for retail competition
for all customers.
The
Current Structure model modifications are based on an assumption
that changes in the existing structure would produce greater savings
and protection for consumers than competition among power suppliers
at the retail level. The Limited Access model assumes that competition
at the retail level may be beneficial for only a limited set of
customers qualified by certain characteristics. However, in view
of the evolving market and the possibility of increasing pressure,
a Limited Access model may be only a transitional structure to the
Open Access Model. The Open Access Model assumes that greater benefits
and protection for consumers can result from competition among suppliers
for all customers. The Open Access and the Limited Access Models
assume an end-state condition after a significant portion or all
of the local utilities have implemented retail competition. (Chapter
5 discusses preconditions that would need to be met to establish
retail competition.)
The
basic structural differences between the existing Current Structure
Model
(Chart
4-2) and relationships to those of the Modified Current Structure
(Chart 4-3), Limited and Open Access Models (Chart 4-4 and Chart
4-5, respectively) may be noted by comparing elements, especially
in the lower half of the charts.
Each
of the charts has four separate zones. The circle in the lowest
zone indicates the states 835,905 customers. The power flow to customers,
and in the rest of the chart as well, is indicated by a solid line.
Data and contractual flow for metering, billing, and payment information
is indicated by a dashed line. These lines run from the customers
up to the local distribution companies and the metering, billing
and collection functions in the second zone.
Also
in the second zone are the Energy Service Companies (which provide
competitive retail service to customers) and the transmission line
owners. The possible changes and options here are described later
in this chapter and in Chapter 5.
In
the third zone are the wholesale power supply functions, the Nebraska
generators, the power marketers, the ISO or regional transmission
group, and options in this set of functions including the concepts
for a Nebraska Power Transaction Center, and a Nebraska Generation
Cooperative. Consistent common assumptions for the wholesale level,
each of the three alternative structure charts combine the generation
owners into a single oval but also identify with separate ovals
other power supply functions provided by existing fully integrated
entities, (including wholesale power marketing, control area, scheduling
coordination, regional transmission and ancillary services).
The
top zone indicates the utility control areas and scheduling coordinators
that maintain an important role in assuring reliability and quality
of service in the state's power flows. In a retail market, power
supply is the competitive commodity. The customer must either directly
or through an agency arrange for Transmission and Ancillary services
for the delivery of power to their Local Distribution Company (LDC).
In the three alternative structure charts these service areas agreements
are included as one of the functions of the LDCs along with the
Metering, Billing and Collection (MBC) services provided to customers.
The
Current Structure Model
As
noted above, the Current Structure Model (Chart 4-2) is based on
the existing structure of the industry in Nebraska. It assumes competition
in wholesale power supply, but no competition among suppliers at
the retail level. Service is purchased under bundled cost-of-service
rates set for each class of customers by local utility boards. Each
segment of the industry's current operations are described below
and questions related to these operations are discussed at greater
length in Chapter 5.
4.3.1
Current Structure Generation
Nebraska's
electric facilities are individually-owned or jointly-owned by groups
of the 170 wholesale and retail entities operating within the state.
As the largest systems in the state, NPPD, OPPD and LES own many
of the major generating plants. In 1995, Nebraska systems owned
a total of 5,512 megawatts of accredited or demonstrated generating
capability. In addition to these facilities, Nebraska systems purchased
1,031 megawatts of firm capacity and an addition 84 megawatts of
non-firm capacity (without reserves). The 26 major generating resources
are listed on Table 4-1.
The
Current Structure of the industry in Chart 4-2 includes all sources
of generation within and outside the state. It shows the general
ownership of generation by wholesale power marketers, Nebraska generators
and others. It also implies a range of voluntary alliances, bilateral
contracts and inter-local arrangements among the various generation
suppliers, transmission owners and distribution companies. The dashed
lines on Chart 4-2 indicate these arrangements. Generation expansion
planning is conducted on a voluntary basis. Individual utilities
are responsible for wholesale power marketing, however increasing
out-source arrangements are likely. There are also questions concerning
whether Nebraska consumer-owned systems, or out-of-state entities
will construct new generating plants in the state to meet growth
in demand. Additional questions have also been raised concerning
possible divestiture of generating plants to out-of-state entities.
Nebraska's
Current Structure will face continuing pressures from the the changing
market, surrounding states. determinations on retail competition,
and from the potential for a federal mandate to modify the industry
structure to allow retail access to multiple competitive suppliers.
4.3.1
Current Structure Transmission and Sub-transmission
The
major owners of transmission in the state are WAPA, NPPD, OPPD,
LES, and Tri-State Generation and Transmission Company. All of these
companies except Tri-State are members of the MAPP. The existing
high voltage (345kV, 230kV, 161kV and 115kV) transmission network
in Nebraska (see Map M5-1 in Chapter 5) consists of more than 6,200
miles of transmission lines with an investment cost of about $597,050,000.
These transmission facilities are interconnected with regional facilities
in surrounding states for purposes of reliability and transfer of
power and energy. The Nebraska high voltage transmission network
is split into two distinct regions, the eastern region and the western
region. Presently, the split between these two regions involves
the transmission systems on either side of the Grand Island/Hastings
area. The eastern Nebraska region is inherently secure and stable
because typically 80 percent of the entire state's load resides
in the eastern region. (Stability increases when load or demand
and generation are well-matched.) The western Nebraska region is
on the western edge of the Eastern Interconnected System of the
United States and exhibits completely different operational characteristics.
Sparse population results in low demand and a large generation/load
mismatch in this area. There is also a heavy reliance on the bulk
transmission system for delivery of generation from this area to
the state's load centers in eastern Nebraska.
As
may be noted on Map M4-2 (Mid-Continent Area Power Pool), Nebraska
is interconnected with three of the nine North American Electric
Reliability Council regions. Interconnections exist with MAPP thorough
Iowa and South Dakota and allow transactions with the 70 MAPP members;
Western Nebraska interconnections link the state through Wyoming
to the Western Systems Coordinating Council grid; and interconnections
through Kansas and Missouri link the Nebraska systems to the Southwest
Power Pool.
Geographical
relationships between load and generation and the transactions of
regional energy markets will impact future transmission limitations
or "bottlenecks" in Nebraska. Six critical transmission
interfaces have been identified in Nebraska representing constrained
paths: Gerald Gentleman Station (GCS) Eastflow Stability Interface;
W. Nebraska. W. Kansas Transmission Interface; Grand Island. Lincoln
Area Transmission Interface; Cooper Southflow Transmission Interface;
Fort Calhoun. West Omaha Transmission Interface; Sub 3459. Sub 3456
Transmission Interface (Omaha area). The regional utilities have
developed operating procedures and curtailment procedures to address
high utilization of these constrained paths. Increases in firm transmission
capacity usage on these interfaces may require the addition of new
high voltage facilities. Future power flows through these paths
must be monitored closely.
The
existing (34.5kV and 69kV) subtransmission facilities in Nebraska
consist of more than 6,600 miles of lines with an investment cost
of about $201,475,000. (See Map M5-2 in Chapter 5 outlining the
subtransmission network.) The subtransmission system is normally
a direct step down from the 161kV and 115kV high voltage transmission
systems. Since the 1960s, state law has required open access to
transmission above 34.5kV to support competition at the wholesale
level.
The
construction of the transmission and subtransmission systems is
expected to continue on an individual basis as new and existing
customers increase load demands and facilities are rebuilt to maintain
or enhance reliability. An increase in competitive power purchases
could also increase the need to undertake additional transmission
and subtransmission construction. Even if Nebraska systems do not
engage in retail competition, open access to transmission mandated
by the Federal Energy Regulatory Commission could place additional
stresses on the state's transmission network.
Current
Structure Distribution
Distribution
facilities are that part of the electrical system that delivers
power and energy directly to the ultimate customer. They include:
distribution substations, distribution lines, associated equipment,
points of transformation to utilization voltages, and meters.
Distribution
substations step down the voltage from transmission or subtransmission
levels to voltage levels suitable for distribution. The distribution
lines that carry energy from the distribution substations to local
load areas are called "main" or "primary" feeders
and generally operate in Nebraska between 2.4 kilovolt and 25.0
kilovolt levels, depending upon design requirements. Numerous taps
or lateral lines are attached to main feeder lines as required to
distribute electricity throughout the service area. "Tie lines"
are often constructed between feeder lines to provide backup energy
sources for load areas in the event of damage to a feeder line due
to severe weather or other incidents.
Voltage
is usually stepped down one more times from the distribution level
to the utilization level by line transformers installed near customer
load points. Utilization voltages vary considerably in level and
configuration. Common household service is provided at 120/240 volts,
single phase. Many small commercial consumers and some farms take
service at 120/208, 120/240, or 277/480 volts, three phase. Larger
commercial or industrial customers sometimes take delivery at 2,400
to 15,000 volts, three phase.
Nebraska
utilities have reported more than 85,000 pole/circuit miles of primary
distribution lines in operation in 1995, and over $1.5 billion in
investment. As might be expected, more than 75 percent of the distribution
line miles in operation are in rural areas of Nebraska.
NPPD
is currently undertaking a program to transfer selected rural distribution
systems to public power districts to increase efficiencies. Other
voluntary mergers may be undertaken. In addition, some of Nebraska's
Local Distribution Companies could be affected by proposals for
divestiture (privatization). These changes would affect maintenance
and expansion of distribution lines and metering, billing and collection
functions.
The
current structure has metering, billing and payment collection under
the control of the LDC. In addition to poles and wires, the LDC's
own and operate the meter and read and check it for accuracy. The
meter is the primary billing input device and service regulations
protect it from obstruction and tampering.
Some
LDCs contract for all or parts of their MBC functions. It is likely
that more will opt for outsourcing with or without retail choice.
Contracting-out is done as a cost- saving measure and also offers
an opportunity to increase metering and billing flexibility and
capability. It may offer the ability to bill time-of-use rates and
print multiple line items on electric bills for new services offered
or for consolidated billings.
Modified
Current Structure Model
Under
the Modified Current Structure (Chart 4-3) operational functions
related to the LDC and its metering and billing operations would
remain unchanged. Although mergers or divestiture of distribution
systems could take place, or MBC functions could be out-sourced,
there would be no competition for customers at the retail level.
However, there are several possibilities where the current structure
could be modified or reorganized to gain potential operational and
other efficiencies in transmission, generation, and the wholesale
market.
These
changes may be undertaken while preconditions for competition are
evolving in the region. Much of how they might evolve centers on
the question of how the Nebraska systems may work together to improve
the current industry structure, or go separate ways in alliances
and business relationships with private entities that may undermine
the current cooperation with which the Nebraska systems function.
The sections below outline modifications which are discussed at
greater length in Chapter 5.
4.4.1
Regional Independent System Operator (ISO)
The
establishment of a MAPP ISO or other Regional Transmission Organization
(RTO) to operate and or own transmission is one possibility shown
on the Modified Current Structure Chart 4-3. A proposed MAPP Independent
System Operator (ISO) and tariff was not approved by the membership
in late 1998. However, a proposed regional tariff administered by
MAPP was approved by the membership of the MAPP RTC in May 1999
and is filed with FERC for approval. The tariff could be implemented
in early 2000.
The
FERC generally requires any utility with substantial transmission
facilities requesting merger to join an FERC approved ISO or other
independent operating entity that would then have control of the
merging utilities' transmission. Some MAPP RTC members involved
in mergers and under such requirements have joined the Midwest ISO
or the Southwest Power Pool ISO to satisfy the FERC requirement.
Some transmission owning companies have proposed forming a regionally
operating and separate Transmission Company (TransCo) by spinning
off their transmission facilities. Northern States Power, First
Energy Corporation and Entergy Corporation have announced such plans
as of January 1999. Several MAPP members are investigating the potential
to enter into agreements with such a regional transmission company
to operate their facilities as a FERC qualifying ISO. It is likely
that some form of ISO will evolve in the MAPP region with in the
next couple years. While a Nebraska-only ISO is regarded as too
small to offset overhead and administration costs and be a viable
player in the region, there is potential for the current MAPP Security
Center to be contracted with to perform ISO functions for an all-publicly
owned transmission company that would include other public systems
in the region. A discussion of the ISO and RTO functions and structure
is included in Chapter 5.
4.4.2
Nebraska Power Transaction Center
The
second potential change illustrated on the Modified Current Structure
Model is a Nebraska Power Transaction Center (NPTC). This concept
is similar to the OASIS electronic bulletin board required by the
FERC's Open Transmission Access Order 889. The MAPP region has an
OASIS operating which allows wholesale electric buyers and sellers
that subscribe to this Internet based service the ability to monitor
all transmission reservations and prices. This is a real time system
with minute-to-minute updates.
The
NPTC would be an administrative facility to enhance the ability
to purchase and sell at cost plus an administrative fee Nebraska
public power resources by establishing a bidding forum among Nebraska
buyers and sellers. The purpose would be to ensure that the primary
benefits of public power resources that are not already committed
can be made available to other Nebraska wholesale utilities to keep
wholesale rates in Nebraska as low as possible. The bidding would
include a procedure that after a designated offer period to sell
has expired the selling entity would proceed to offer its excess
power in out-of-state markets. The NPTC would require some commitment
on the part of Nebraska generating entities and purchasing entities.
Sellers would need to adhere to a cooperative approach and not "bid-up"
pricing. Buyers would need to be restricted from purchasing at cost-based
pricing and re-selling out-of-state for a profit.
4.4.3
Nebraska Generating Cooperative Company
More
advantageous than the administrative approach of the NPTC, or in
addition to it, is the structural approach of combining current
or future generation of the consumer-owned systems. This would also
be an effort to retain low-cost power resources in the state and
maintain low wholesale power prices. Chart 4-3 shows a single Nebraska
Generating Cooperative Company (NGCC) that could operate with central
dispatch similar to a closed or tight power pool from which all
wholesale and retail distribution entities in Nebraska could purchase
power from on an equitable basis. In one form, a comprehensive NGCC
could include future generation and assignment of existing generation
with proper credits for generation owners and accommodation for
current out-of-state sales to avoid negative rate impacts. Such
assignments of existing generation could also be phased in over
time. A more limited form of NGCC, or an initial phase, would include
only joint development and ownership of new generating resources.
Other
changes in the structure of generation could include divestiture
of plants, construction of new merchant plants by private companies,
or coordination of generation expansion by the Nebraska systems.
Generation expansion under the Current Structure has individual
utilities determine their own need for future resources and is voluntarily
coordinated by the NPA in a statewide report to the NPRB. A statewide
generation expansion plan could be made mandatory under restructuring
legislation.
The
concept of a changes in generation and a statewide generation cooperative
is discussed more detail in Chapter 5.
4.4.4
Power Supply Coordination Scheduling Coordinator
Noted
at the top of each chart are the Utility Control Area and Scheduling
Coordinator functions. Currently the utility control area balances
generation with load. In a competitive retail market, not all loads
will be served by the incumbent utility generators. There will need
to be changes in how power and energy transactions are processed,
booked and billed to maintain continuity of service. A potential
changing role in providing customer choice and opening up retail
markets is that of Power Supply Coordination (PSC).
Two
primary power supply coordination functions will be energy scheduling
and financial settlement. These functions will make it possible
to provide power delivery services to Electric Services Companies
(ESC) on behalf of contracted retail customers they serve.
This
changed role is one of many transitions in operation that would
be required by Limited Access or Open Access.
Limited
Access Structure Model
At
the wholesale level, the Limited Access structure may include the
ISO, Nebraska Power Transaction Center, or the Nebraska Generation
Cooperative described above. It may also contain a Regional Power
Exchange (PX) that would be a regional transaction center for wholesale
power sales. However, the most significant difference between this
structure and the Current Structure models is the entrance of Energy
Service Companies (ESCo. s) to provide competitive power supply
and other services at the retail level.
The
Limited Access model assumes that retail competition only occurs
for a set of customers qualified by certain characteristics or by
events. These customers are shown in Chart 4-4 in a separate oval
as "Selected Customers". This could be a class of customers
qualified by size of load (i.e. 1 megawatt or greater) or type of
customer (residential or governmental accounts). It is assumed that
to avoid duplication of services, the metering, billing and collection
services for these customers would continue through the Local Distribution
Company.
There
are several different ways to structure Limited Access. It may be
part of a phased approach to allow a gradual opening of access to
all customers on a scheduled basis. It may be used as a mechanism
in a state in which most consumers face difficult access issues
to protect those consumers and prevent cost-shifting from those
who acquire a competitive supplier. Or it may be structured as a
"buy-through" or price reduction for customers who acquire
a competitive supplier, with the LDC as a partner in the transaction.
Limited
Access presents a number of problems. In a phased approach, the
resulting disaggregation of load can create difficulties and higher
costs for consumers who are eventually left behind by suppliers
seeking customers who meet an optimum profile. Proper access pricing
for a limited group may be too costly. Even though access may be
limited to a small portion of the customers in the state there are
substantial setup and dispatch and control center expansion costs
that would occur. A certain portion of these costs such as setting
up procedures and communication links for daily operation and billing
are fixed regardless the number of customers involved in retail
choice. And "buy-through" programs may create dissatisfaction
with required customer qualifications and create hidden cost shifts.
Limited Access would also require certain regulatory standards and
protections to be in place, as well as a statewide regulatory body
as discussed in Chapter 3.
Possible
benefits and costs of a Limited Access structure must be weighed
in terms of both the Current Modified Structure and the Open Access
Model.
Open
Access Model
The
Open Access Model Chart 4-5 requires the most significant change
from the Current Structure. Under Open Access, all functions move
to the competitive arena except for transmission and distribution
services, and in some states metering, billing and collection are
also being considered for the competitive market (as indicated by
the separation of metering, billing and collection in Chart 4-5).
Open Access in Nebraska could occur without changes to the current
service area structure or the ownership of existing generation.
The wholesale supply options would be the same as those described
for Modified Current Access or Limited Access. The major change
would take place at the customer level.
As
shown in Chart 4-5, all customers would have access, in theory,
to competitive suppliers. Existing and new generation suppliers
and Competitive Power Suppliers acting as power marketers would
have access to consumers in the participating retail service areas.
If allowed, Competitive Power Suppliers are likely to offer a wide
variety of services including real-time and time-of-use pricing,
load control systems, load profiling service, bill paying insurance,
multiple utility account bill consolidation, security and outage
detection services, appliance maintenance, Internet and telephone
services. State standards and rules for supplier certification would
be required as would consumer protection, consumer education, business
transaction protocols and other rules to guide the competitive market.
This would necessitate full development of a state regulatory agency
to promulgate, oversee, and enforce standard rules to augment the
efforts of regulation by local boards. It would imply a major shift
from local control and cost-of-service electric supply. Start-up,
transaction and transition costs would need to be offset by the
benefits of lower power costs.
In
addition to changes at the customer level, Chart 4-5 indicates that
power marketers would contract with the generation providers to
schedule power and Ancillary Services over the Transmission System.
A Regional Transmission Organization (RTO) acts as the Independent
System Operator in coordination with the local Control Areas (CA).
The RTO administers a regional wide FERC approved tariff. There
are a variety of transmissions related services necessary for each
power transaction to ensure proper scheduling and delivery of energy
to the LDC. All Coordination and Scheduling functions are the responsibility
today of the Control Area. It is likely that third party Scheduling
Coordinators will evolve to help take care some of these scheduling
and coordination functions. Competitive Power Suppliers would work
through Control Area operators to handle the large volume transactions
generated by retail competition and multiple suppliers entering
the market. Control Areas may be combined to realize operating efficiencies
or the ISO could assume some of their functions. The details are
discussed in Chapter 5.
Assessing
Key Impacts or Issues Under Each Model
As
noted in Chapter Two, establishment of competitive retail markets
and associated changes in structure is taking place in 19 other
states. Six have comprehensive plans underway.
The
changes in structure for generation common among the states that
have restructured to retail competition are to require some form
of divestiture of generation resources, either in part or in total.
Some of the reasons relate to identifying stranded cost of generation
and how to recover it from ratepayers and or stockholders. In some
states a power pool or exchange were formed or expanded to offer
a shared resource pool available to all at a market clearing price.
There
are often mandated retail rate decreases or freezes that may come
in part from the margins on generation as well as transmission and
distribution revenues. California has mandated that retail choice
will be allowed only through newly formed Energy Service Providers
that have no connection with the local wires company. The task force
views such a mandate would be a duplication of services and unnecessarily
removes the benefit that consumer owned LDCs currently provide.
Nebraska LDCs are not-for profit and thus would continue to offer
service at cost on a non-discriminatory basis rates that are set
in a public form.
The
changes in structure for transmission and distribution common among
the early acting retail choice states are the formation of a regional
transmission operating entity such as a non-profit Independent System
Operator (ISO). Transmission and distribution rates may be capped
or regulated under performance based measures. The establishment
of computer based transaction centers and consumer education programs
required on statewide or regional basis will have significant impact
on current day operations. These are required to accommodate the
large increase in number of sellers and buyers of transmission services
and the cost will be significant to start and operate. This includes
the settlement process to support the billing of power that was
scheduled against what was delivered. There are changes necessary
to continue to fund and operate demand side management and environmental
programs both current and future.
In
addition to structural changes, developments in other states show
new operational changes are required to make either limited or open
access market forms possible.
These
operational changes include:
- Open
flow of pricing information to consumers
- Adequate
rules and guidelines for suppliers
- Adequate
consumer protections
- Adequate
operating center infrastructure
- Adequate
software and business protocols for coordination of generation,
transmission, and distribution functions
- Statewide
administration of rules and oversight
- Adequate
billing and accounting support
Summary
In
summary, these models should be viewed as a starting point to assess
possible impacts of wholesale and retail competition on Nebraska's
electric systems.
Expanded
wholesale competition in the region, and changes in transmission
organizations and structure, will need to be accommodated by the
Nebraska systems. It is preferable for the changes to be accommodated
in a manner that retains Nebraska's low costs.
In
terms of retail competition, modification of the Current Structure
at the distribution level offers opportunities to enhance operational
efficiencies and prepare for the pressures of competition.
Limited
Access would allow a managed approach to retail competition by allowing
only a specific group of customers to have access, or access to
be timed. Limited Access is seen only as a transitional stage to
Open Access.
Open
Access, allowing all customers to have access to a competitive supplier,
would require substantial changes to the structure, operations,
and principles of the Nebraska distribution systems.
The
following chapter provides an examination of structural and operational
issues of the various models and options for Nebraska.
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