FERC Filings
SUPPLEMENTAL COMMENTS OF THE ELECTRIC POWER SUPPLY ASSOCIATION re: INVESTIGATION OF TERMS AND CONDITIONS OF PUBLIC UTILITY MARKET-BASED RATE AUTHORIZATIONS
THE CHAIRMAN’S STRAWMAN IS INCONSISTENT WITH A BLANKET REFUND CONDITION
On February 7th, Chairman Wood released a Strawman addressing market power monitoring and mitigation in the context of the Commission’s efforts to develop a standard market design. While focused on a long-term solution to market power monitoring and mitigation, many of the comments in the paper are equally true for any short-term or interim approach the Commission takes to market power monitoring and mitigation. If the Commission does believe that some sort of interim measures are in fact necessary, EPSA urges the Commission to follow the suggestions in the Chairman’s February 7th Strawman. EPSA agrees with the Chairman’s Strawman that mitigation “generally should be prospective in order to avoid the regulatory risk and disruption to settlements and financial accounting caused by refunds.” This is true regardless of whether or not RTOs are operating well-functioning markets. The Chairman’s Strawman recommends that “ex post mitigation such as refunds and revising prices after they are posted or agreed upon should be avoided if at all possible,” noting that “it is administratively difficult to accurately mitigate prices because the effort is costly, subject to error, and creates regulatory risk.” In addition, “ex post measures undermine the long-term commitments that are necessary for market participants to undertake efficient investments and protect against market risks.”