FERC Filings
FERC RTO NOPR COMMENTS
Addressing Continuing Inefficiencies in Wholesale Markets
Addressing Continuing Inefficiencies
in Wholesale Markets
The NOPR represents a serious and concerted effort by the Commission to focus on the remaining issues that directly inhibit the ability of all power suppliers to compete in the marketplace. It is in this regard that EPSA urges FERC to pursue properly structured and motivated RTOs. EPSA's recommendations and comments focus on those areas where RTOs meaningfully can address and, in some instances significantly ameliorate, ongoing market and engineering inefficiencies.
RTOs cannot solve all industry or market problems. Indeed, there are many problems for which the establishment of an RTO will have little or no impact. The establishment of RTOs will not alone complete needed restructuring of the nation's transmission systems and the ways that transmission services are provided. Nonetheless, since RTOs can in many ways directly affect the vitality of the electric industry, their establishment is critical to the industry's continued evolution. In general, RTOs should:
1. provide an organizational framework within which competitive power markets can flourish;
2. provide to the extent desired by the market, the option of one-stop shopping for all transmission and redispatch services within a reasonably large region;
3. provide clearly defined and fair rules and procedures allowing for the interconnection of new or expanded generation;
4. consolidate all transmission operations in a set of control areas that is large enough in the aggregate to eliminate pancaked rates, internalize most loop-flows, and meet the other conditions and functional objectives discussed below (without participating in power markets);
5. enforce nationally established reliability standards;
6. provide an organizational and governance structure that allows for non-discriminatory tariff development and administration;
7. offer and facilitate economically efficient cost-based transmission service;
8. offer and facilitate economically efficient congestion management options with prices known in advance; and,
9. provide certain data gathering and reporting services to allow market participants and FERC to evaluate the competitiveness of transmission and power markets.
In the sections below, EPSA's comments will address both the Commission's proposed characteristics and functions for RTOs, as well as the important role EPSA envisions for RTOs.