Tuesday, March 09, 2010

Coalition Urges FERC to Examine Electricity Sellers' Costs and Revenues in Wholesale Power Markets

On March 5, 2010, a broad coalition of groups, including PULP, filed comments with FERC urging closer assessment of the results of private wholesale markets. The functionally deregulated markets are run by private RTO utilities under FERC jurisdiction, such as the NYISO. FERC allows the RTOs to set prices for electricity using "market-based rates" demanded secretly by sellers in spot market auctions, without advance public filing, without prior review by FERC, and without meaningful possibility of revision or refund of unreasonable rates.

The comments were filed by:
  • AARP
  • American Forest & Paper Association
  • American Municipal Power, Inc.
  • American Public Power Association
  • Blue Ridge Power Agency
  • Citizen Power
  • Citizens Utility Board
  • Coalition of Midwest Transmission Customers
  • Connecticut Office of Consumer Counsel
  • Delaware Municipal Electric Corporation, Inc.
  • Electricity Consumers Resource Council
  • Illinois Attorney General
  • Industrial Energy Consumers of America
  • Kennebunk Light & Power
  • Maryland Office of People's Counsel
  • Modesto Irrigation District
  • Municipal Electric Utilities Association of New York
  • National Consumer Law Center
  • NEPOOL Industrial Customer Coalition
  • New England Public Power Association
  • New York Association of Public Power
  • Office of the People’s Counsel for the District of Columbia
  • Ohio Partners for Affordable Energy
  • Pennsylvania Office of Consumer Advocate
  • PJM Industrial Coalition
  • Public Citizen
  • Public Power Association of New Jersey
  • Public Utility Law Project of New York, Inc.
  • Virginia Citizens Consumer Council
The comments point out that during FERC's 15 years of experimentation with RTO electricity markets, there has been no "accurate determination of whether these changes have in fact produced net benefits to end-use consumers."

The comments call for an examination of all components of power generator costs and revenues to ascertain whether FERC's market-based rate system is really achieving results for consumers superior to those under traditional regulation, where rates are based on reviewed prudent costs and an allowance for a reasonable return to investors.

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