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For Release
Contact: Jonathan Schneider The Large Public Power Council (LPPC) has urged the Federal Energy Regulatory Commission (FERC) to examine several market mechanisms that are distorting competition, hindering the development of renewables and providing little benefit to electricity customers and consumers. In a statement submitted to FERC’s Conference on Competition, the LPPC asked FERC to help stabilize transmission pricing through RTO and ISO service areas. The statement was presented to the FERC conference on Tuesday, February 27, by Jan Schori, Past Chair of the LPPC and General Manager of the Sacramento Municipal Utility District. Schori told the Commission that, volatile congestion-based LMP pricing and marginal priced losses “are affecting the certainty regarding deliverability and cost” as utilities endeavor to engage remote renewable resources. “Many LPPC members are actively seeking to make long term investments in new renewable resources,” Schori told the Commissioners, “but they require stable, cost-certain, long-term transmission rights across RTO /ISO service areas in order to commit to the purchase of such resources. Renewable developers need our long term commitment to build these new resources.” Schori asked the Commission to require RTOs and ISOs to provide firm, price- certain transmission services in the interests of promoting interstate commerce and the development of renewable resources. The LPPC also told FERC that, “changing market rules in organized markets can have an adverse impact on bordering non-RTO utilities in bilateral markets. It has been our experience,” the LPPC stipulated, “that such entities have been established and modified without sufficient coordination with adjacent systems to ensure that inconsistent operating protocols do not harm reliability and commercial trade.” Such practices, the LPPC asserted, have resulted in unexpected new costs, additional staff and additional training for more complex operating protocols. The LPPC recommended that the Commission require, “more meaningful and effective pre-filing coordination” of such changes with each affected neighboring control area. “This would benefit all parties,” the LPPC maintained, “by reducing the number of tariff disputes.” The LPPC also asked FERC to “look at the adverse effect that highest priced bid markets have on the bilateral marketplace and consumer prices. Natural gas-fired generation is now the marginal unit of supply in virtually all markets in the country,” Schori stated. “Sellers price their power in accordance with what they believe the buyer’s alternative is -- and in accordance with what they think they could get if their power were to be sold to the highest paying buyer in the market. From a consumer-oriented perspective, highest price bid markets appear to be adversely influencing pricing in non-RTO bilateral markets. I do not think our customers, or the market for renewable resources benefit from this situation.” The Large Public Power Council represents 25 of the largest publicly owned and operated utilities in the nation. Together, LPPC members control 90% of the public agency owned, but non-federal transmission investment in the nation. ### A copy
of the LPPC statement is electronically available by contacting Christine
Goss at cgoss@smithharroff.com or at 703 740 1755. |
