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RPM Buyers' Group Proposal Is Superceded by FERC Conference and Independent RPM Evaluation, EPSA Says
WASHINGTON, D.C. - A recent request by the RPM Buyers group for a conference on the Reliability Pricing Model (RPM) used in the PJM Interconnection should be denied, according to comments filed Friday by the Electric Power Supply Association (EPSA) with the Federal Energy Regulatory Commission (FERC). RPM is a pricing system that was developed by regulators and stakeholders to ensure there is an adequate and reliable supply of electricity for PJM's 51 million customers, who reside in 13 states and the District of Columbia.
In its comments, EPSA pointed out that the buyers' group request for a technical conference on RPM is potentially disruptive to the upcoming planned capacity market auction in May and duplicative of a technical conference on organized electricity markets already scheduled by FERC on May 7. In its filing, EPSA said, "The Commission must deny the RPM Buyers' Motion given the fact that several formal assessments of RPM are announced or underway and due to the seemingly retroactive nature of the relief requested, which poses significant concerns and is not appropriate as settled auction results should not be changed." EPSA said that further review of the capacity market construct should await an independent report of the market scheduled to be released before June 30. EPSA pointed out that in a December 2006 order approving the RPM settlement, FERC expressly determined that RPM was a just and reasonable alternative to the prior construct.
EPSA said, "This request for a technical conference is part of an ongoing pattern by RPM Buyers (individually or collectively) to brandish RPM as a failure and call for investigation and eventual evisceration of the mechanism and results to date." EPSA said, "These actions are harmful to and distract from the serious efforts by PJM and other PJM market participants to develop a responsive and well-functioning marketplace that includes the necessary investment and innovation to ensure reliability and competitive outcomes for the ultimate benefit of consumers."
EPSA said, "We are generally supportive of FERC's intention to review RPM performance to ensure prices remain just and reasonable; any such review and potential adjustments must be made on a forward-looking prospective basis for future auctions only.
"The Commission should not take any action that would create uncertainty related to the upcoming May 2008 Base Residual Auction, which is a critical event in further establishing the forward capacity market in PJM as it is the first "regularly" scheduled auction for the delivery period three years in advance," said EPSA.
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.