FERC Filings

EPSA Comments on FERC's Post-Technical Conference on Market-Base Rates for Public Utilities

Introduction

Since the 1980s, the Commission has allowed companies to sell power at market-based rates if the seller and its affiliates have demonstrated that they: 1) do not have, or have adequately mitigated, generation market power; 2) do not have, or have adequately mitigated, transmission market power; 3) lack an ability to create barriers to entry to the wholesale power market; and 4) do not engage in affiliate abuse or reciprocal dealing. Compliance with this four-prong analysis, which comprises the Commission’s review of market-based rate authority, helps ensure that market-based rates are just and reasonable.

In the last several years, the Commission has focused its attention largely on generation market power when assessing or reviewing a public utility’s potential for market power, without according equal weight to the other three prongs. Yet, as several panelists stated at the Dec. 7 technical conference, these other three prongs can have an equally pernicious effect on consumers and on competitive markets. Accordingly, it is essential to fully consider and clarify each of these additional prongs during this generic rulemaking proceeding. EPSA urges the Commission to act swiftly to craft a comprehensive market power test that properly accounts for the exercise of market power in all four areas.

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