Post-Technical Conference Comments of National Grid USA under AD05-5, et al.

Joel deJesus Counsel May 2, 2005 VIA ELECTRONIC FILING The Honorable Magalie Roman Salas, Esq., Secretary Federal Energy Regulatory Commission 888 First Street, NE Washington, DC 20426 Re: Docket Nos. AD05-5-000 and PL03-1-000 Dear Secretary Salas: Please find enclosed for electronic filing in the above referenced docket, the Post- Technical Conference Comments of National Grid USA. Please do not hesitate to contact me if you have any questions or concerns. Respectfully submitted, Joel deJesus Counsel for National Grid USA 633 Pennsylvania Ave. NW, Sixth Floor Washington, DC 20004 (202) 783-7959 Fax: (202) 783-1489 joel.dejesus@us.ngrid.com UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION ) Transmission Independence and ) Investment ) Docket No. AD05-5-000 ) Pricing Policy for Efficient Operation and ) Expansion of the Transmission Grid ) Docket No. PL03-1-000 ) POST-TECHNICAL CONFERENCE COMMENTS OF NATIONAL GRID USA As requested at the Commissions technical conference held on April 22, 2005 in the above referenced proceedings (Technical Conference), National Grid USA (National Grid) submits the following comments. As discussed in detail below, National Grid strongly supports the finalization of a policy statement on incentives to increase transmission investment and independence. The following comments discuss in detail the general framework for the need and structure of transmission incentives, as presented by Nick Winser at the Technical Conference.1 These comments also address a few points made by other parties at the conference. The following is a summary of our comments: US transmission investment levels have been and continue to be behind those of other countries throughout the world, and there is substantial fragmentation of transmission ownership in the US. As a result, the US transmission grid has suffered through both increasing congestion and reliability levels that are below the international average. In forming transmission incentive policies, the Commission should keep in mind an overall business model for the industry that achieves the Commissions basic goals of secure system operation, competitive wholesale and retail markets working without 1 Mr. Winsers prepared presentation at the Technical Conference is incorporated herein by reference and can be found at the following URL: http://www.ferc.gov/EventCalendar/Files/20050422141957- Nick%20Winser%20Remarks%2022%20April%202005%20Tech%20Conf-%20Public.ppt. market mitigation fixes, and the delivery of economic benefits to customers. From National Grids perspective, that means realigning roles and responsibilities into three independent sectors: an independent market operator; a consolidated independent transmission platform; and a fully competitive supply/generation sector. Recognizing that moving the industry in ...