FERC Considers Changes to Market-Power Test

The Federal Energy Regulatory Commission this week considered alternatives to an ambitious test that aims to guard against market power by merchant generators across the country. More than 70 companies have failed the ?supply-margin assessment? test, put in place in November 2001, and FERC has stopped requiring those with failing grades to make changes. A key debate at the January 13-14 technical conference in Washington, D.C., according to one source, was whether utilities? native load should be included in formulations of the test. Utilities argue that this generation should not be counted as available to use in the marketplace. FERC?s test is a ?limited tool because it deals with the sellers? side, not the buyers? side? of the market-power equation, according to Steven Schleimer, director of marketing and regulatory affairs for Calpine. For Schleimer, another of the shortcomings is that FERC?s screen test does not address utilities? ability to hold ?competitive bidding processes? to build and operate their own cost-of-service assets. While the Mountainview project was not specifically mentioned, Southern California Edison?s project, now pending at FERC, apparently fits that description. FERC has not yet stated when it plans its next step on the supply-margin test.

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FERC Considers Changes to Market-Power Test

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