FERC Filings
COMMENTS OF THE ELECTRIC POWER SUPPLY ASSOCIATION-San Diego Gas & Electric Company -Complainant v. Sellers of Energy and Ancillary Services Into Markets Operated by the California Independent System Operator and the California Power Exchange-Respondents D
1. Restrict bids subject to review
EPSA does not believe that all bids above $150/MWh, or above any threshold price level, should be subject to review and potential mitigation by the Commission. EPSA believes that mitigation measures should only be triggered upon evidence of market power abuse and that bids above the ISO threshold certainly do not imply market power per se. Accordingly, the soft cap reporting requirement should be altered to match reporting burden to the proper subject of Commission scrutiny.
It is well known that periodically this summer, electricity prices at major Western trading hubs exceeded $150/MWh. There is no evidence that these prices are the result of an abuse of market power. Nevertheless, the presence of these prices means that generators have opportunity costs above $150/MWh. In such a circumstance, it seems overkill to require all generators to document the bidder’s pre-bid expectations of opportunity costs. FERC staff will be quickly inundated by the filings and may be unable to keep up with the anticipated monitoring function. A far better allocation of scarce Commission resources would be to focus reporting requirements and monitoring tasks on bids that more likely involve the exercise of market power as a result of flawed market rules or other factors than those bids that represent high opportunity costs from neighboring regions or scarcity rents available from a fleeting confluence of supply and demand factors.
As more fully set forth below, EPSA proposes that rather than requiring all generators to submit weekly information on all bids above $150, the Commission require that generators simply maintain, for a limited period, the information the Commission presently seeks. Such information would be available to the Commission if scrutiny is triggered by clearly articulated screening criteria. Some screening criteria could flatly rule out reporting or monitoring of retained data. FERC should establish criteria such that if loads subject to the as-bid market are too small a percentage of total load, or if the variance in bids around the threshold level is so small as to be if relevant, reporting and retention requirements could be suspended.