EPSA, APPA weigh in on FERC market issues

Top officials from the Electric Power Supply Association (EPSA) and the American Public Power Association (APPA) testified before a congressional panel on June 4 regarding various market issues before the Federal Energy Regulatory Commission (FERC).

Both EPSA President and CEO John Shelk and APPA President and CEO Sue Kelly testified before the U.S. House Energy & Commerce Committee’s Subcommittee on Energy & Power hearing, “Discussion Draft on Accountability and Department of Energy Perspectives on Title IV: Energy Efficiency.”

With enhanced authorities, staff, and resources, the number of FERC investigations and civil penalty enforcement actions has increased greatly in recent years, according to a background brief filed by House committee staff. But some market participants have raised concerns about fairness, transparency and due process, according to the brief.

The APPA represents community-owned electric utilities. EPSA represents competitive whole power suppliers.

Kelly said APPA has articulated concerns over the past 10 years about many of the wholesale electricity markets operated under FERC authority by certain Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs).

Many of the regional organizations are not in fact markets, but rather are highly complex administrative constructs with myriad rules, which change with alarming frequency, Kelly said.

APPA’s members in many regions must face the day-to-day complexity and costs of operating under these constructs. APPA is also concerned about the time-consuming and resource-intensive stakeholder processes and the lack of transparency in the governance processes of some RTOs.

EPSA’s Shelk said his organization along with groups such as Edison Electric Institute (EEI), Nuclear Energy Institute (NEI), the Natural Gas Supply Association (NGSA) and America’s Natural Gas Alliance (ANGA) “in stressing the importance of further FERC action this year on energy price formation reforms.”

Energy price formation refers to “a basket of issues around how ISOs/RTOs determine the granular Locational Marginal Prices (LMPs) for sales of electric energy,” Shelk said.

While EPSA believes the regional organizations “generally work well,” Shelk said, adding that “accelerating reforms this year will help address concerns about baseload generation, renewables, flexible resources and capacity markets.”

Shelk also said that the surplus supply that generally existed when wholesale competition and restructuring began in the 1990s has been reduced as plants retired for a variety of reasons.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.