Latest News
EPSA, NIPPC URGE FERC TO REJECT BPA PLOY
"EPSA and NIPPC urge the Commission to close the loophole that allows utilities to deprive competitive generators of legitimate compensation for reactive power service."
WASHINGTON, D.C. - The Electric Power Supply Association (EPSA) and the Northwest & Intermountain Power Producers Coalition (NIPPC) yesterday filed joint comments with the Federal Energy Regulatory Commission protesting Bonneville Power Administration's (BPA) request to maneuver its wholesale power rates to avoid paying compensation to non-affiliated generators for reactive power. (Editor's note: Reactive power supports the voltages that must be controlled for system reliability and thus is an essential component of the service provided by suppliers of electricity).
Robert Kahn, Executive Director of NIPCC, states, "If allowed to stand, BPA's ill-advised request would completely abrogate FERC's longstanding policy promoting comparability, transparency and non-discrimination in reactive power supply, an essential reliability service."
"Enforcement of FERC's comparability policy relies on utility self-representations that they are not being compensated for reactive power, and hence non-affiliated generators should not be compensated either," said John E. Shelk, EPSA President and CEO. "However, this is not the case here. BPA has actually admitted on the record that it is attempting to bury its reactive supply service rate in its power sales rates rather than its transmission service rates in a blatant attempt to avoid comparable payments lawfully due to competitive suppliers."
In their protest, EPSA and NIPPC state, "The existence of serious comparability issues is well-known. The looming question is: what does the Commission need to do to effectively address the problem? To date, the Commission's decisions clearly indicate that utilities are exploiting a huge loophole created by Order No. 2003-A. Therefore, unless and until this loophole is closed, the effectiveness and reasonableness of the Commission's approach to comparability in reactive compensation greatly depends upon its strict scrutiny of whether a utility is actually obtaining revenue for reactive power that its own or affiliated generators provide...." EPSA and NIPPC respectfully urge the Commission to begin to close that loophole by denying BPA's effort to deprive merchant generators' of legitimate compensation for reactive power services."
In numerous orders, FERC has repeatedly stated that comparability is a bedrock principle of open access and competitive market development. Hence, endorsing BPA's resort to a misleading accounting device to deprive competitive generators of reactive compensation is incompatible with this well-established principle, would result in undue discrimination and should be rejected.
<center>
-EPSA-</center>
EPSAProtestBPAReactive.pdf
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.