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EPSA ON NERC'S 2007 LONG TERM RELIABILITY ASSESSMENT

EPSA Welcomes NERC Pledge on Uncommitted Generation Resources and NERC's Positive Comments About PJM and New England Capacity Markets

WASHINGTON, D.C. - John E. Shelk, President and CEO of the Electric Power Supply Association (EPSA), released the following statement in response to today's publciation of the North American Electric Reliability Corporation's annual (NERC) 2007 Long-Term Reliability Assessment:

EPSA appreciates the hard work that NERC put into its latest annual report and the efforts NERC made to reach out to EPSA and other stakeholders. This annual report is widely read and respected by policymakers, the media and others for good reason. EPSA members continue to work with NERC and others to assure future electric system reliability through reliance on competitive power markets.

EPSA is concerned this year, as it has been in the past, that NERC's analysis is skewed by the way it categorizes power generation resources as "committed" or "uncommitted." The effect of the existing approach is to undercount availability of electricity from competitive suppliers. NERCs own report acknowledges that the forecasted gap between demand and supply drops almost in half if "uncommitted" resources are counted.

While new generation investments are undoubtedly necessary, where and how they are made matters greatly to consumers and the environment. For example, recent cases in Oklahoma and Louisiana demonstrate that ignoring existing and available plants operated by competitive power suppliers results in costly and unnecessary proposals by some utilities to build their own power plants at ratepayer expense. Thus, EPSA welcomes NERC's pledge to work to improve next year's report so that resources are properly counted.

Finally, EPSA welcomes the NERC report's description of the new forward capacity markets in New England and the PJM Interconnection as mechanisms that are supporting generation additions in these markets that "look promising for the future." The results of the latest PJM Reliability Pricing Model auction, announced last week, confirm that these new capacity markets are starting to work as intended.

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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.