FERC Filings

SUPPLEMENTAL COMMENTS OF THE ELECTRIC POWER SUPPLY ASSOCIATION re: INVESTIGATION OF TERMS AND CONDITIONS OF PUBLIC UTILITY MARKET-BASED RATE AUTHORIZATIONS

A BLANKET REFUND CONDITION IS NOT SOUND OR LEGAL

Along with the agenda for the conference, the Commission staff issued a paper that included an overview of the comments and a list of possible modifications to the tariff condition. Responses on the specific questions asked in the Order are attached. EPSA welcomes the staff paper and its recognition of the serious legal and policy concerns raised by the Commission’s November 20th Order. As EPSA and numerous others pointed out in response to the November 20th Order, imposing an open-ended refund obligation on all market-based rates sales will have significant adverse impacts on wholesale markets, increasing regulatory risk, dampening investment and risk management opportunities, and thereby reducing supply and increasing costs for consumers. In addition, such conditioning will lead to a sub-optimal mix of generating units, favoring base-load plants when peaking units may be needed. Peaking plants must recover their entire operating cost in a limited number of days, or even hours. Competitive power suppliers bear all the risks associated with these plants and must have confidence that their sales are final in order to ensure a return on their investment. Finally, such an action by the Commission also violates the Federal Power Act.

• View Previous Section
• View Next Section
• Back to Issue Menu