FERC Filings
Comments of EPSA in Support of Joint Response of Indicated Stakeholders to 2003 Status Report Submitted by SeTrans Sponsors and Request for Relief
Filing
CLECO Power, LLC
Dalton Utilities
Entergy Services, Inc.
Georgia Transmission Corporation
JEA
MEAG Power
Sam Rayburn G&T Electric Cooperative,Inc.
Southern Company Services, Inc.
City of Tallahassee, Florida
The Electric Power Supply Association (EPSA) hereby files in support of the “Joint Response on Behalf of the Indicated Stakeholders to the December 10, 2003 Status Report Submitted by the SeTrans Sponsors and Request for Relief,” (Joint Response) filed in the above-captioned proceedings on February 13, 2004. EPSA is the national trade association representing competitive power suppliers, including generators and marketers. These suppliers, who account for nearly 40 percent of the installed generating capacity in the United States, provide reliable and competitively priced electricity from environmentally responsible facilities serving global power markets. EPSA seeks to bring the benefits of competition to all power customers and has been an active participant in the stakeholder proceedings on the development of the SeTrans proposal. EPSA was as equally distressed and disappointed as the Indicated Stakeholders at the December 2, 2003 announcement, and subsequent December 10, 2003 report, by the SeTrans sponsors of their suspension of further work on a competitive market for the Southeast.
The Commission must be equally dismayed since the termination of SeTrans effort, once again, delays the Commission’s goals of improving reliability and saving consumers money by establishing competitive regional wholesale electricity markets. Since the Order No. 2000 compliance filings made in October 2000 by the Southern Companies and the Southwest Power Pool (SPP), including Entergy, the Commission has experienced a long series of fits and starts concerning the establishment of an independent transmission operator in the Southeast.
Competitive suppliers’ have made substantial investment in the Southeast in anticipation of Order No. 2000 being implemented by now, but no substansive progress has been made. Establishment of an independently run transmission network over which competitive suppliers could deliver their product to that regional market for the benefit of consumers as envisioned by Commission policy, should be a reality by now. Since 1998, generators have added more than 30,000 megawatts of capacity in SERC, while southeast utilities have added little generation or transmission infrastructure. These significant SERC capacity additions came at almost no cost to consumers and continue to benefit them. Despite the generation additions by competitive suppliers, an independent open access transmission network does not yet exist, and with the demise of SeTrans, a comparable independent regional entity has yet to take its place.
While falling far short of the RTO envisioned by Order No. 2000, EPSA urges the Commission to take the actions recommended in the Joint Response, including ordering immediate compliance with the OASIS-related requirements. Additionally, EPSA supports the other recommendations made by the Indicated Stakeholders, including: initiating a formal Commission investigation into competitive conditions in the Southeast; issuing a show-cause order concerning the implementation of market power mitigation measures (such as the appointment of a fulltime independent market monitor in the Southeast and audits of transmission operation and interconnection practices and procedures); and issuing a show-cause order concerning continued market-based rate authority for Southern and Entergy, who already have been found to have unmitigated market power in the Southeast. The establishment of an independent operator of the electrical transmission system in the Southeast is particularly important in light of the mounting evidence, documented in numerous proceedings, of the continuing limitations on transmission access to the southeastern grid. The Joint Response sets out the initial parameters needed to facilitate non-discriminatory information and transmission access and the suggestions therein should be implemented immediately.
In addition to the remedies proposed by the Indicated Stakeholders, EPSA has developed a White Paper outlining the Essential Elements of Well-Functioning Wholesale Competitive Markets. This paper addresses both RTO markets and bilateral markets, with specific suggestions on how the development of well-functioning bilateral markets can help stakeholders and policymakers transition to organized markets. The Commission can promote the eventual development of well-functioning markets in the Southeast by taking the initial transitional steps described in the Indicated Stakeholders’ recommendations to end discriminatory transmission in the Southeast and in the Essential Elements Paper to promote well-functioning bilateral markets. Implementation of bilateral markets will make the full benefits of competitive suppliers’ generation additions available to southeast customers, while giving state regulators confidence in the movement to independent transmission operation. At this point, it is the quickest way for the region’s utilities to begin meeting the requirements of Order No. 2000. Without immediate action by the Commission, generators and other power suppliers in the Southeast will continue to be denied access to wholesale markets, to the detriment of consumers, competition and the market place.
The bilateral market elements in the paper include independent OASIS and market monitoring also addressed by the Indicated Stakeholders in their recommendations. In addition, the paper further outlines competitive solicitations, economic dispatch procedures, energy imbalance and ancillary services markets, congestion management and a regional transmission planning process. The Commission should require that the southeast utilities implement these transition market elements now, so that Order No. 2000 compliance can follow in an efficient manner.
One issue highlighted in the Essential Elements Paper is competitive procurement. Entergy and Southern both have contested cases regarding competitive solicitation that demonstrate the need for a non-discriminatory solicitation process in the Southeast. Inconsistent and sometimes discriminatory competitive solicitation has been a problem not only in the Southeast, but nationally. For this reason, EPSA has developed its Guidebook to Competitive Procurement, which is also attached. The Guidebook serves as a template of best practices utilities should adopt to facilitate transparent competitive solicitations that achieve consensus credibility and that can avoid the delay and cost of litigation. The Commission should compel utilities, especially those in the Southeast to use the Guidebook to craft workable competitive solicitation programs.
Wherefore, EPSA joins the Indicated Stakeholders in urging the Commission to take immediate action to remedy market power problems and to require the southeastern utilities to take transitional steps to implement workably competitive bilateral markets in the Southeast.
Respectfully submitted,
Julie Simon, Vice President of Policy
Jack Cashin, Senior Manager of Policy
Electric Power Supply Association
1401 New York Ave, NW
11th Floor
Washington, D.C. 20005
March 4, 2004
CERTIFICATE OF SERVICE
I hereby certify that I have served a copy of the comments by first class mail, postage prepaid, upon each person designated on the official service list compiled by the Secretary in this proceeding.
Dated at Washington, D.C., March 4, 2004.
________________________
Julie Simon