FERC Filings
Comments of EPSA on Commisions's Efforts to Encourage Voluntary Price Reporting
Preface
On May 14, 2004, the Commission noticed a conference on Market Liquidity, Energy Price Discovery, and Natural Gas and Electricity Price Indices, inviting comments on the Staff recommendations contained in the May 5, 2004, Report on Natural Gas and Electricity Price Indices. The Electric Power Supply Association (EPSA) welcomes this opportunity and hereby files these comments in the above-captioned proceedings. As large buyers of natural gas and large sellers of electricity, EPSA members use indices for price discovery and risk management, and have supported the Commission’s efforts to encourage voluntary price reporting.
The notice lists three subjects that the Commission would like input on: overall market liquidity and its current sufficiency for the market; the status and robustness of reporting to indices and the adequacy of indices; and options for future Commission action on price indices and price formation. EPSA’s summary views on these points are as follows:
• Market liquidity has increased over the past two years, providing market participants with improved price information.
• The quality of indices has greatly improved due to Commission initiatives, rapid industry response, commercial index developers’ reaction to the market and the merits of voluntary reporting.
• The Commission’s actions, as well as the industry’s responses have eliminated the need for further Commission action on price reporting and indices.
The necessary regulatory structures to promote voluntary electric and natural gas price reporting have been provided and confidence in price reporting and indices has been restored; therefore, the Commission should recognize progress to date and continue to promote the success of voluntary reporting. However, the best way for the Commission to improve price transparency and promote competition in wholesale electric markets, is to continue its efforts to establish regional organized markets.