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EPSA Urges FERC to Reject Maryland PSC Complaint

WASHINGTON, D.C. - The Electric Power Supply Association (EPSA) today strongly urged the Federal Energy Regulatory Commission (FERC) to reject a complaint filed by the Maryland Public Service Commission (PSC) related to exemptions from market offer caps that historically have been applied to specified generation resources in the PJM Interconnection. The PJM Interconnection coordinates and directs the reliability of the electrical system that serves 13 states (including Maryland) and the District of Columbia.

"The PSC complaint fails to provide any valid basis for deviating from FERC's previous investigation and analysis of PJMs market exemptions," said John E. Shelk, president and CEO of EPSA. The exemptions in question currently allow the lifting of price offer caps for generation resources that were constructed during a specified time period as well as for generation resources that are used to relieve reactive elements on specified interfaces. FERC previously has determined that the generation resources in question do not hold market power. In its filing, EPSA pointed out that the PSC's complaint completely lacked any foundation for its assertion that market power had been exercised by any exempt generator.

"The exemptions were developed because of FERC's recognition that in certain circumstances, there is a legitimate market need to bid above normal offer caps,"Shelk said. "If FERC shared the Maryland PSC's simplistic view that the only explanation for a bid in excess of some administratively-defined concept of marginal cost is that a generator is exercising market power, it never would have approved or required the exemptions in the first place," said Shelk.

EPSA also called on FERC to reject the PSC's request for retroactive refunds, which not only lacks merit, according to EPSA, but also violates the Federal Power Acts filed rate doctrine stating that "the refund effective date shall not be earlier than the date of filing of such complaint "

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.