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EPSA Releases Policy Principles For Organized Wholesale Power Markets

"As the national trade association representing leaders of the competitive power sector, EPSA developed these principles as a framework for a continued dialogue with policymakers and other stakeholders to help spur necessary action. The focus is on how market design and rules should continue to evolve in organized markets in order to realize the full benefits of competition in the time frame the nation requires to succeed in the 21st century."

WASHINGTON, D.C. - The Electric Power Supply Association (EPSA) today released Principles to Power America, Competitive Market Evolution: The next decade of progress," a set of principles to further help refine and improve the organized wholesale electricity markets that already serve over two-thirds of the U.S. economy and continue to expand.

The document stresses that "Consumers have reaped significant benefits from competitive electricity markets, including greater transparency, major innovation through new technologies, more efficient operation of existing facilities, efficient price risk management, and the shift of much of the infrastructure development risk to investors. Competition, both wholesale and retail, will continue to bring these and other benefits to consumers but market designs and rules can and should be improved consistent with sound competitive principles."

The paper recognizes that "the organized markets under existing wholesale market designs and rules are working, broadly speaking, but they can and should be improved." To help foster a substantive dialogue EPSA has outlined a series of principles in seven broad areas: 1. Consumer Benefits from Organized Markets; 2. Open Competition Among Supply Resources; 3. Competitive Market Price Signals; 4. Centralized Capacity Market Improvements; 5. Proper Role for Demand Response; 6. Ancillary Services Pricing; and 7. Market Mitigation in Perspective. A copy of the entire document is available at www.epsa.org.

EPSA President & CEO John E. Shelk introduces the principles in a foreword by writing, "As the national trade association representing leaders of the competitive power sector, EPSA developed these principles as a framework for a continued dialogue with policymakers and other stakeholders to help spur necessary action. The focus is on how market design and rules should continue to evolve in organized markets in order to realize the full benefits of competition in the time frame the nation requires to succeed in the 21st century."

Among other issues, the principles document highlights the significance of the recent Federal Energy Regulatory Commission (FERC) final rule on demand response (DR) compensation, "If, as is the case under the final rule, DR is not compensated properly consistent with the Federal Power Act, and thus adversely impacts supply resources, then no matter what other market design and rules are improved, organized markets will not produce sustainable, competitive results consistent with long term investment needs."

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.