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Lake Erie Loop Update

Posted in Electricity Transmission by Cheryl Morgan on the August 13th, 2008

It appears that the Senate has taken an interest in the Lake Erie Loop scam. According to Mike Giberson of Knowledge Problem, Senator Charles Schumer of New York has asked FERC to investigate the issue. Giberson supports this call, and we agree. This was a clear case of traders pushing up costs by doing something that would never be done in normal operation, and which could have been avoided. Because the scam involved exploiting seams between two RTOs (NYISO and PJM), FERC is the only regulatory body that can actually look at the issue. It will be interesting to see how this plays out.

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