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EPSA Further Urges Court To Reverse FERC On "Station Power"

WASHINGTON, DC - The Electric Power Supply Association (EPSA) today filed a reply brief with the U.S. Court of Appeals for the District of Columbia Circuit in Calpine Corporation v. Federal Energy Regulatory Commission further urging the court to reverse FERC's approach to station power. EPSA was joined on the brief by the Cogeneration Association of California and the Energy Producers and Users Coalition. (Editor's note: Station power refers to the electricity that power plants produce and self-supply to operate.)

"While tediously technical, this issue goes to the heart of preserving non-discriminatory wholesale electricity markets under the Federal Power Act," said John E. Shelk, EPSA President & CEO. "It is simply absurd that power plants that produce electricity that is in part consumed to run the plants should be forced to pay retail rates for self-supplied electricity. Yet that could be the outcome if the court does not send the matter back to FERC to be corrected. This should be done in any context, but particularly so given today’s soft markets."

The reply brief makes several key arguments:

• "The issue is critically important to the ability of competitive power producers to compete on a level playing field in the wholesale markets administered by the Commission, and to receive the full and fair value of the power they produce."

• "By allowing states to impose conflicting station power netting periods, FERC's orders will either subject generators to duplicative and unduly discriminatory station power charges, or require FERC to follow the states' lead and order the CAISO [California Independent System Operator] to adopt the netting period adopted by the state. Neither result is permitted under the Federal Power Act."

• "As Intervenor-Petitioners [EPSA et al] explained in their opening brief, if the Commission's orders below are not corrected and individual states are allowed to set the applicable netting interval, (1) millions of dollars of retail charges will likely be imposed on competitive power generators that are not imposed on vertically integrated utilities with generation assets (or even if they would be imposed on utilities, the utilities could simply include such costs in their regulated rates, an option not available to competitive wholesale suppliers); and (2) varying retail costs will likely be imposed in multi-state RTOs, thereby impacting the competitive position of generators located in different states but competing in the same regional wholesale market."

The present appeal grows out of an earlier decision by the U.S. Court of Appeals for the D.C. Circuit directing FERC to justify its long-standing station power policy. Instead of doing so, FERC reversed that policy without justification in EPSA's view. A copy of the reply brief is available at www.epsa.org.

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.