
DATE: Saturday, March 29, 1997              TAG: 9703290296

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY AKWELI PARKER, STAFF WRITER 

                                            LENGTH:   61 lines

UTILITIES TO PUT TRANSMISSION TEST IN GEAR

If you're an electric utility, money is power. So when somebody else's power is coursing through your network, putting an extra load on your system, naturally you want some type of compensation.

But right now that's not the way it works.

Starting Tuesday, however, Virginia Power and five other electric utilities will embark on an experiment to track the path their electricity takes. When it's over, they hope to get a handle on fairer payment schemes for using each other's equipment and gain insight as to how to keep systems reliable.

The experiment will test principles of the General Agreement on Parallel Paths, a pact developed by a broad band of transmission users in the United States and Canada.

When a utility sends power from outside a customer's area, the juice is, well, loose: the path electricity follows may not be the same as that originally set out in a power purchase contract - an agreement between big power buyers and utilities.

Instead, the electricity takes the path of least resistance. Some of that power could go through a different utility's grid, a more circuitous path.

Meanwhile, that other utility doesn't get paid for carrying somebody else's power.

``(Unlike) the old contract paths - drawing a straight line from point A to point B - power doesn't move that way anymore,'' said Virginia Power spokesman Bill Byrd.

Power networks have gotten bigger, more complicated and more interconnected over the past few decades.

Thus, the time-honored way of charging a flat fee based on a contract path ``doesn't properly compensate the parties whose facilities are used,'' Byrd said.

``It's a matter of fairness.''

Under the experiment, which is being conducted with the blessings of the Federal Energy Regulatory Commission, the utilities agree to distribute transmission revenuesbased on the way power actually flows through their systems.

Big wholesale power customers whose power takes alternative paths won't pay any more or less in transmission fees - at least during the test period.

The test comes at a time of explosive growth for wholesale wheeling - the free-market phenomenon of big power users choosing their power company.

Virginia Power's Wholesale Power Group sold 2 million megawatt hours for $80 million in 1995. Last year, the unit sold 6.5 million megawatt hours.

The six eastern U.S. utilities include Virginia Power; Allegheny Power Service Corp. of Hagerstown, Md.; Centerior Energy Corp. of Independence, Ohio; Ohio Edison of Akron, Ohio; Ontario Hydro and Atlanta-based Southern Company. ILLUSTRATION: Graphic

TRACKING POWER

The problem: When a utility sends power from outside customer's

area, electricity is loose and may travel through another power

company's grid. The second utility is not paid for carrying extra

power.

The experiment: Six electric companies, including Virginia Power,

agree to distribute revenue based on the way power flows through

their systems.