FERC Clarifies Which|Employees May Be Shared

WASHINGTON (CN) - The Federal Energy Regulatory Commission proposes to change restrictions on which employees may be shared across divisions of power companies that both generate power for sales on the open market and serve a captive customer base.

The Commission proposes that a public utility serving captive customers and its market regulated power sale affiliates cannot share employees that make economic dispatch decisions, determine timing of scheduled outages, or are responsible for resource planning and fuel procurement.

The practice of using "shared employees" is particularly common at smaller utilities and power generating cooperatives where cost of overhead has a greater impact on the rates charged to retail customers than it does at large utility companies.

However, as more utilities have acquired generating facilities that produce power surplus to the needs of their own customers, it became apparent that there could be an incentive to burden retail customers with the costs of building those facilities rather than sharing the income from excess power sales to lower those customers' rates. FERC hopes that by eliminating the concept of "shared employees" it will not be possible for companies to game either their retail customers or sales to the wholesale market.

The public has 60 days to comment on the Commission's proposed rule.

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