FERC Filings
Comments of EPSA, Colorado Independent Energy Association, Independent Energy Producers of California, IPPNY and WPTF re: Public Utility Market-Based Rate Authorizations
Market Behavioral Rules Should Apply to All Market Participants
Another issue identified in Commissioner Brownell’s concurring opinion is the applicability of these proposed rules to only one market segment: sellers. As Commissioner Brownell correctly points out, “equitable rules should apply to all industry segments.” Once properly developed, market behavior rules must be imposed on all market participants, not only sellers of power. Actionable conduct by any market participant - including RTO management - necessarily skews and disrupts the market for all participants.
To capture the behavior of all market segments and all market participants, the Commission should require independent RTOs and ISOs to submit tariffs that include market behavior rules, addressing the full range of questionable market behaviors for all market participants, developed by the stakeholders in a particular market. As discussed in Section 3 above, the Commission needs to clarify that specific, Commission-approved rules for independent RTOs and ISOs--which reflect and accommodate business practices, products and services not available in all markets-- should take precedence over the Commission’s more general and generic rules. This deference to well-designed, Commission-approved regional market structures, which promulgate market behavior rules that specify unacceptable behavior, is imperative for the continued development of independently-administered, competitive regional wholesale markets. The surest way to diffuse market power and prevent market anomalies is through RTOs that have the right structures and rules to facilitate liquid markets and independent transmission access.
The application of market behavior standards to all market participants may require the consideration of alternative penalties or remedies for violations, as disgorgement of profits would not be applicable for entities buying power in the marketplace, or for non-jurisdictional entities selling surplus energy at prices that reflect market opportunities.