Latest News
EPSA Strongly Urges FERC To Revamp Flawed Demand Response Proposal
"FERC's DR compensation scheme is an unjustified and unsustainable subsidy that would be borne by residential consumers and would undermine the competitive organized wholesale electricity markets the Commission and EPSA members have worked so hard to develop. The dire consequences of such an action are unacceptable at a time when supplies from a variety of fuels and technologies will continue to be necessary to reliably and affordably keep the lights on for American homes and businesses."
WASHINGTON, D.C. - The Electric Power Supply Association (EPSA) yesterday submitted comments to the Federal Energy Regulatory Commission (FERC) on its recent Supplemental Notice of Proposed Rulemaking and Technical Conference on compensation for demand response (DR) in organized electricity markets. EPSA's filing is the third in a series on this issue, initiated by FERC in a Notice of Proposed Rulemaking (NOPR), and notes that the recent Supplemental NOPR and technical conference only addressed two narrow questions which "barely scratch the surface of the depth and breadth of the inquiry necessary to reach a well-reasoned and factually supportable result in this proceeding."
Speaking on the filing, EPSA President & CEO John E. Shelk said "FERC's DR compensation scheme is an unjustified and unsustainable subsidy that would be borne by residential consumers and would undermine the competitive organized wholesale electricity markets the Commission and EPSA members have worked so hard to develop. The dire consequences of such an action are unacceptable at a time when supplies from a variety of fuels and technologies will continue to be necessary to reliably and affordably keep the lights on for American homes and businesses."
EPSA's comments state "full support for the role properly compensated DR can and should play in wholesale energy markets." The filing went on to say "EPSA reiterates its desire to be a constructive part of the ongoing dialogue on DR compensation. Rather than being wedded to the payment of full LMP in all hours with only cursory tariff language as proposed in the NOPR, a better course of action is to first inquire as to why the 'equivalency' being sought between demand and supply could not be achieved by a straightforward approach based on allowing DR providers to bid into organized wholesale markets (energy, capacity and ancillary services) under the same terms and conditions as those that apply to power suppliers, thereby truly following the 'equivalent payment' principle. The Commission has not undertaken that inquiry and should do so before concluding that the NOPR's subsidy approach is a necessary and appropriate payment for DR that is within the Commission's jurisdiction and meets the Federal Power Act's test of being just and reasonable and not unduly discriminatory or preferential."
EPSA's comments raised a dozen detailed questions that should still be addressed in the proceeding and recommended that FERC issue a Notice of Inquiry to address such questions, or in the alternative "fashion a new proposal that squarely and fully addresses the legal and economic concerns stated by the majority of commenters in this proceeding."
CONTACT: JOHN SHELK
(202) 349-0154or 703-472-8660
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.