On Tuesday, February 27, the Federal Energy Regulatory Commission (FERC) held the first in a series of conferences to examine the state of competition in wholesale power markets. Witnesses included prominent pro-competition economists, utility representatives, state regulators, wind energy companies and large customers. Although some speakers, such as John Anderson from ELCON, told the Commission that the organized markets are not working to the benefit of customers, the majority of the witnesses testified that Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs) are improving electric industry efficiency and transparency, removing barriers to entry, allocating scarcity fairly and providing benefits to customers.
ISO-New England CEO Gordon Van Welie echoed those who believe the organized markets are a success. He told FERC that, in addition to lowering wholesale power costs in the Northeast and shielding consumers from the risk of financing new generation, ISO-NE would be the most efficient means of achieving regional and federal climate change, implementing a renewable portfolio standard and demand-side management goals.
Roy Thilly, CEO of Wisconsin Public Power Inc. (WPPI), noted that there were some positive aspects of the organized markets, e.g. increased reliability; faster response to outages and greater transparency. However, Thilly said, there were also significant problems in those markets: needed generation and transmission is not getting built; long-term power supply contracts are hard to obtain and some stakeholders have an interest in maintaining congestion. He urged the Commission to step back and undertake a credible assessment of whether the markets were benefiting consumers.
APPA's Joe Nipper told the Commission that the Association was working on a number of reports, which they would be submitting to FERC shortly, from their Electric Market Reform Initiative (EMRI). He also advocated the need to reduce transmission discrimination particularly in rural areas and strongly encouraged FERC to improve RTO regional planning and work to increase transparency and accountability to the end-consumer. Nipper encouraged FERC to embrace joint ownership of transmission, indicated that public power was ready, willing and able to contribute in needed transmission investment.