FERC COMMISSIONERS ACT TO REINFORCE RESTRUCTURED, COMPETITIVE ELECTRICITY MARKETS

The COMPETE Coalition today applauded Federal Energy Regulatory Commission (FERC) Chairman Joseph T. Kelliher and the commissioners for taking action to affirm the innovation, efficiency and non-discriminatory transmission access made possible by restructured, competitive electricity markets.

Late last week, FERC issued an advanced notice of proposed rulemaking (ANOPR) that, among other things, would promote demand-response bidding on equal footing with generating resources, and explore other proposed improvements in organized, competitive wholesale power markets.

COMPETE also welcomed the Commission’s ANOPR (“Wholesale Competition in Regions with Organized Electric Markets”) as an opportunity to secure additional customer benefit from organized electricity markets without upsetting the significant efforts that already have been made in providing demonstrable benefits to wholesale customers, as the ANOPR explicitly acknowledges. The ANOPR also commends the RTOs and ISOs for working hard to fulfill the Commission’s goals with respect to competition and transmission access.

“The Commission’s ANOPR is an express acknowledgement of the important innovation and efficiencies made possible by restructured, competitive markets. We look forward to the opportunity provided by the Commission’s pending rule-making proceeding to explore demand-response bidding and other improvements that will further and preserve the consumer benefits provided by competitive markets,” said COMPETE Chairman, former U.S. Senator Don Nickles.

In addition to innovative demand-response bidding to promote greater efficiencies and lessen volatility, the Commission’s ANOPR will examine long-term contracting, market monitoring policies and board governance at regional transmission organizations (RTOs) and independent system operators (ISOs).

“The organized markets have the transparency, the technology and the size to make demand response, price signals and long-term contracting work, and we expect that the lessons learned can be transferred to the bilateral markets in the future,” Nickles stated.

Finally, COMPETE welcomed statements from the Commission that affirmed its longstanding policy promoting restructured, competitive markets.

“My personal view is that competition is the correct policy, and that competition can deliver the greatest benefits to consumers – when combined with effective regulation. We are acting to establish the best possible mixture of regulation and competition on behalf of customers,” Chairman Kelliher observed at last Thursday’s FERC meeting.

Commissioner Philip D. Moeller said the ANOPR “is just one of many actions that the Commission is taking to improve and strengthen competitive markets,” and sought “to dispel the false implication that all of the problems are occurring in the competitive wholesale markets, because it is simply not true.”