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EPSA STRONGLY URGES FERC TO REJECT DEFICIENT DUQUESNE APPLICATION TO WITHDRAW FROM PJM

WASHINGTON, D.C. - The Electric Power Supply Association (EPSA) today filed a protest to the proposal of Duquesne Light Company (Duquesne) to withdraw from the PJM Interconnection, L.L.C. (PJM), noting the importance of the case to PJM's 51 million customers.

The proposal, filed with the Federal Energy Regulatory Commission (FERC) on November 8, 2007, presents the Commission with a fundamental policy issue on the implementation and sustainability of forward capacity commitments that are critical to ensuring reliability in organized markets. EPSA's filing documents that Duquesne's application is woefully inadequate and does not address expected adverse impacts to PJM, its regional energy and capacity markets, and other market participants. EPSA urges the Commission to reject the filing as deficient.

"Duquesne has neither offered an orderly transition process to leave PJM, nor demonstrated any effort to acknowledge and resolve the adverse effects of its proposal on reliability, other market participants or the market itself," said EPSA President and CEO John E. Shelk. "With FERC's encouragement and approval, PJM has developed a forward-looking capacity market designed to maintain reliability for all PJM load. There is little value to a capacity obligation for reliability if Duquesne can walk away at will and, in fact, indirectly retain the benefits of that capacity obligation without paying."

The EPSA filing details the many deficiencies of Duquesne's application. "In any decision, the Commission must take any and all necessary additional steps to ensure that Duquesne's departure is appropriately conditioned and does not discourage long-term contracting or undermine RTO market stability." Further, EPSA urges the Commission to ensure that should Duquesne exit PJM, that exit "does not create a precedent that unduly increases market costs or threatens future investments, including investment in demand response technology and resource adequacy infrastructure."

According to Shelk, "Any damage to forward capacity auctions, RTO transmission planning and resource adequacy proceedings would be particularly troubling in light of the need for additional electricity infrastructure over the next few years. FERC should reject Duquesne's hastily attempted departure given the Commission's efforts to foster and implement regional solutions to resource adequacy and reliability."

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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.