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Greenhouse Gas Allocations Must Be Non-discriminatory In Order to Protect Competition and Ratepayers, EPSA Says to Congress

WASHINGTON, D.C. - The Electric Power Supply Association (EPSA) today released proposed guidelines for the allocation of greenhouse gas allowances under a cap-and-trade system if federal legislation provides allowances for the electricity sector to be allocated to local electricity distribution companies (LDCs). EPSA is issuing the guidelines to coincide with the House Energy and Commerce Committee's hearings this week on proposed draft greenhouse gas reduction legislation.

John E. Shelk, president and CEO of EPSA said, "We commend Chairmen Waxman and Markey for moving forward to consider legislation to address greenhouse gas emissions. We look forward to working with Congress on the many aspects of this issue. The allocation or auction of allowances for greenhouse gas emissions is a critical piece of climate change policy and it's important that allowances be distributed in a fair, equitable and non-discriminatory way that does not undermine wholesale power competition."

Shelk said, "Competitive wholesale power suppliers have facilities nationwide and, regardless of the regulatory system under which they operate, these power suppliers will need emissions allowances. Some proposals would provide free allowances directly to regulated electric LDCs. The guidelines proposed today are designed to make sure that competition and reliability are not harmed should Congress elect to pursue the LDC option. Under that scenario, it's vital that LDCs are directed to sell their allowances within a specified period of time and at a fair market value without preferential treatment to their own electric generation affiliates. Additionally, since the objective is to protect low-income consumers, mechanisms must be established that ensure proper implementation, transparency and oversight of any programs funded with proceeds from allowances. All electricity suppliers must be treated fairly when it comes to allowances, particularly in the many states that are served primarily by competitive wholesale power suppliers - including many of the states represented on the House Energy and Commerce Committee."

The EPSA White Paper Proposed Guidelines If Congress Allocates Greenhouse Gas Allowances to Electric Power Sector Local Distribution Companies is available at www.epsa.org.

EPSA formally adopted a climate change position paper advocating for "comprehensive, mandatory federal legislation to require steps to minimize the impact of greenhouse gases on the environment" in January 2007, the first multi-fuel national electricity trade association to do so.

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.