Once every decade or so, the feds launch a new crusade to convert Americans to the metric system, only to give way to indifference or outright ridicule.

Contracts for federally funded highway projects were to conform to metric measurement by Sept. 30, 2000 — until Congress revoked the deadline. Yet federal agencies already had been required to go metric — both by the Omnibus Trade and Competiveness Act of 1988, which had imposed a 1992 deadline, and before that by Executive Order 12770, signed by President Bush the Elder in 1991. And of course, that was after President Reagan in 1982 had disbanded and cancelled funding for the U.S. Metric Board, which had been created seven years earlier through Public Law 94-168, the Metric Conversion Act of 1975, to coordinate the country’s voluntary conversion centimeters, kilograms, and degrees Celsius.

Now, however, comes a metric crusade of a different sort — a request from the staff of the Federal Energy Regulatory Commission, filed Feb. 3, 1010, asking for written comments from the U.S. electric utility industry on a set of performance metrics that the staff has proposed to track and evaluate the performance of ISO/RTO operations and their regional wholesale power markets. And like the metric initiatives that have marked the past forty years, this one appears mired in politics of the most divisive sort.

In fact, one could say that FERC was goaded by politics to launch this benchmarking effort in the first place. Two years ago, Congress had called on the U.S. Government Accountability Office (GAO) to take a critical look at FERC’s most beloved pet project, its fostering of Regional Transmission Organizations (RTOs) to spearhead the development of competitive power markets. But given the influence in Congress that the public power and rural co-op sectors enjoy, one should recognize the GAO project for what it was: a charge from Congress to build a case against competitive markets, RTOs, and electric restructuring generally. The result was a 90-plus-page study:  GAO-08-987, Electric Restructuring: FERC Could Take Additional Steps to Analyze Regional Transmission Organizations’ Benefits and Performance, released in September 2008.

The GAO study had found a lack of consensus on whether RTOs produce benefits to outweigh their costs, and a marked division among experts and industry participants on whether the markets developed and administered by RTOs actually offered any benefits to ordinary electricity consumers. It suggested that FERC should develop a set of benchmarking tools to develop empirical evidence on whether RTOs are doing the job they were meant to do.

It’s no wonder, then, that FERC’s many industry opponents seized on this chance, when they filed their comments in early and mid-March, to revisit the electric restructuring of the 1990s. Rather than offer constructive advice on the question that FERC has asked — how to measure and improve RTO performance —many comments have chosen to step back and reload. They seek to turn back the clock and reverse the market revolution.

The California Public Utilities Commission may be reconsidering electric retail choice for state ratepayers, but it still typifies this reactionary trend. In its comments in FERC’s  inquiry, the CPUC suggests additional metrics not to help FERC evaluate internal RTO performance, but to measure impacts on ratepayers: “Whether ISOs have provided net benefits to ratepayers or have resulted in electricity prices for consumers that are lower then they otherwise would have been.” As with the RTO doubters in general, the CPUC remains fixated on embedded cost as the lodestone of successful regulation. Thus, while the FERC staff has proposed metrics that would track LMPs (load-weighted locational marginal prices), the CPUC wants a counterfactual analysis: how would prices have turned out in a world without RTOs? It proposes a price-cost markup index that measures the difference between the price paid in wholesale RTO markets compared to the estimated production costs incurred by the marginal unit (the last-cleared bid) needed to serve retail load.

Even when RTO numbers look good, however, they are not to be trusted, according to many commenters. An anti-market group led by AARP, APPA (American Public Power Association), and many public and municipal power agencies and consumer advocates claims that FERC’s proposed metric to track LMPs is not all that useful:

“For example, if LMPs fall, as they did in 2009, this is not necessarily indicative of the performance of RTO markets and could simply be a reflection of declining fuel costs, loss of load due to economic recessions and other factors. The question remains as to whether prices fell to the extent that would be expected in a competitive market.”

“One key metric is missing,” they say: “generator costs as compared to revenues. Determination of the degree to which there is a divergence between actual costs of power production and revenues received from consumers is necessary to ascertain the benefits of moving from cost-of-service regulation … to market based rates.”

Another public power advocate, the Transmission Agency of Northern California, argues for benchmarks appropriate to a re-evaluation of basic policy: “FERC’s proposed metrics,” writes TANC, “will not assist the commission in answering the ultimate question posed by the GAO Report.

“This proceeding,” it adds, “should result in metrics that will assist Congress, the Commission, and the public in determining whether the policy choice of creating these RTOs/ISOs produces the desired savings.”

One might wonder why FERC should have allowed itself in the first place to be goaded into responding to GAO’s challenge, as the new proceeding serves only to give new impetus to the anti-market, “just say no” crowd. These opponents see any benchmark designed to designed to measure and improve RTO performance as largely irrelevant, as their aim is not to make RTOs better, but to stop them in their tracks. That is, to return to the days electric power plants were constructed and owned by utilities to serve their respective customer groups, rather than owned by private, for-profit groups, who offer up their energy supplies by bidding into the regional wholesale markets run by the RTOs.

But the FERC staff has at its disposal a good rejoinder, if it should choose to make the point. It all has to do with financial risk and infrastructure development.

Imagine if utilities were still the prime developers and builders of new power plant projects. How would they deal with the political and financial uncertainty of future carbon controls, or the technical and engineering uncertainty of devising methods of carbon capture and sequestration? How would plant-building utilities insulate ratepayers from the risk of spiraling plant construction costs, or the outright burden of project cancellations, as occurred when utilities rushed to build nukes during the last big build cycle in the 1970s and early 1980s. How would utilities today justify putting ratepayers at risk for the big bets that that face developers of tomorrow’s new power plant technologies, thermal and photoelectric solar, and the still unproven IGCC model (Integrated Gasification Combined-Cycle) of converting coal to synthetic gas for burning in combustion turbines?

Even the metrics proposed by the FERC staff don’t capture all the benefits that RTOs bring to the table, relative to infrastructure incentives and risk management. One can question even the very assumption that lower prices are automatically to be preferred.

Consider the comments of the Retail Energy Supply Association, a little-known trade group whose members include ConEd Solutions, Constellation NewEnergy, Exelon Energy, Green Mountain Energy, Integrys Energy Services, Liberty Power, PPL EnergyPlus, and Sempra Energy Solutions. “Presumably,” notes RESA, “lower LMPs are ‘better.’ But the resource adequacy construct of some RTOs, such as the Midwest ISO, theoretically relies on high, volatile LMPs as the source of and incentive for recovery of investment by new generation.”

RESA continues: “From this example, one can see that simply tracking LMPs in a performance metric does not by itself provide any meaningful assessment of RTO performance – a context is required for each metric and, more importantly, the merit of the set of all metrics should be assessed together, to see if they work logically as a whole.”

FirstEnergy noted in its comments that 80% of all new renewable energy projects are being built in RTO areas, even though RTOs serve only about one-half of total U.S. electrical demand.

“RTOs also provide transparency about prices and the locational value of transmission,” FirstEnergy adds, “making many investors more willing to invest in strengthening the grid.”