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REAP clarifies ERO governance position
Rose comments that REAP does not see a need to enforce board independence but wants a board structure that ensures fair decisions Alan Bailey for Petroleum News
On July 22 Chris Rose, executive director of Renewable Energy Alaska Project, filed comments with the Regulatory Commission of Alaska, clarifying REAP’s position on the governance of an electric reliability organization, or ERO. Rose wrote that a filing that he had made in June had been incorrectly interpreted as meaning that REAP wants the commission to enforce the independence of an ERO board of directors.
During this year’s legislative session the state Legislature passed Senate Bill 123, a bill enabling RCA to regulate an ERO. The RCA has opened three dockets for developing regulations to implement SB 123. The primary purpose of an ERO is to ensure a coordinated approach to the management and operation of an interconnected electrical system.
At the end of last year the six Alaska Railbelt utilities issued a memorandum of understanding for the formation of the Railbelt Reliability Council, or RRC, which would operate as an ERO for the Railbelt.
Questions over governance One of the more contentious aspects of the regulatory requirements relates to the extent to which the ERO board should have to be independent from the utilities that operate the electrical system. On the one hand, the utilities have significant expertise in the operation of the system. On the other hand, independent power producers and other stakeholders in the system want a say in how the system is operated. The RRC MOU specified a 13-member board, with a director from each of the utilities, six non-utility directors, and the RRC CEO as the 13th member.
SB 123 allows considerable flexibility over board membership, with the statute requiring a board “formed as an independent board; a balanced stakeholder board; or a combination independent and balanced stakeholder board.”
In his new filing Rose wrote that his June filing had not intended to indicate that REAP wants the RCA to mandate an independent ERO board. Nor did REAP call for any of the utilities to be eliminated from the ERO board, Rose wrote. The critical issue is to achieve balance by ensuring that no one stakeholder or group of stakeholders with the same interests can dominate board decision making, he wrote.
Rose, who was recently selected as a member of the RRC implementation committee, expressed his appreciation at opportunities for REAP to comment on the RRC MOU, and at the utilities’ accomplishment in agreeing on a form of ERO. However, he also expressed concern about the low level of non-utility involvement in the MOU process.
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