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EPSA URGES OHIO REGULATORS TO SUPPORT COMPETITIVE MARKET POLICIES

"Competitive wholesale markets and uniform price auctions have been shown to provide net benefits for consumers and should continue to be relied upon to ensure that consumers in places like Ohio get the best possible deal"

WASHINGTON, D.C. - The Electric Power Supply Association (EPSA) today filed a response with the Public Utilities Commission of Ohio (PUCO) supporting the competitiveness of wholesale markets and the benefits of a uniform clearing price auction mechanism. On September 21, PUCO staff submitted a report on the FirstEnergy utilities’ competitive procurement plan for meeting standard offer service customer needs. The Staff Report erroneously called into question the competitiveness of wholesale markets generally and the auction mechanisms used in organized markets.

"Competition in wholesale markets, especially those administered by independent entities such as the Midwest ISO or PJM, has repeatedly been found to be robust as well as 'just and reasonable,'" EPSA President and CEO John E. Shelk said. "Competitive wholesale markets and uniform price auctions have been shown to provide net benefits for consumers and should continue to be relied upon to ensure that consumers in places like Ohio get the best possible deal."

"Wholesale competition itself is not the problem. Artificial rate stabilization mechanisms do not allow the market to reflect true prices and thus create perverse results in retail rates," the filing noted. "If rates rise substantially when Ohio's rate stabilization mechanisms expire in December 2008, wholesale competition is not to blame. Rather, higher market prices would reflect the sudden impact of costs that have mounted gradually over the years under the rate caps.:

EPSA;s filing pointed out that :Competition not only results in reasonable and clear rates for customers, but it also assures the most reliable and efficient market possible.: EPSA went on to say :It is clear that Ohio has the right structures in place to be complemented and enhanced by a competitive bidding process for meeting default retail customers; power needs.:

A copy of the filing is available at www.epsa.org.
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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.