5.7. ERMUSR 03-13-2013 - Laserfiche WebLink

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Wholesale Elechicity Markets—APPA rook an active role in EMRI continued to work with its allies to raise awareness of the discussions and decision-making on a proposed energy the problems of wholesale electricity markets operated by imbalance market(EIM)for the western interconnection in regional transmission organizations(RTOs)and to educate close cooperation with our members in the region.The efforts Congress on the Federal Energy Regulatory Commission's included the production of fact sheets,attendance at public lack of supervision of RTO markets. meetings and submission of comments.APPA sponsored presentations and written materials by the economist Kenneth C API' Accn�nphshexm is Rose to illustrate the potential danger of an EIM transitioning to a regional transmission organization(RTO)and to critique the National Renewable Energy Laboratory's analysis of the • estimated benefits of an EIM, the latter co-sponsored by " National Rural Electric Cooperative Association.To date,the EIM d proposal has failed to gamer sufficient support to move forward (,I Milli 11114 EMRI maintained its focus on the highly problematic I Stil if S capacity markets in the eastern RTOs.APPA has submitted s comments and protests in a number of Federal Energy , )• Regulatory Commission dockets involving the use of the ' " capacity markets to impede public power's ability to self- F supply and is participating in the Third Circuit U.S. Court , ' s,'"�� ''?°• of Appeals review of the FERC orders on the minimum offer The House of Representatives,in particular,continued price rule in PJM's capacity market,along with NRECA and a to focus in 2012 on legislation to modify or delay number of individual public power utilities and rural electric implementation of various Clean Air Act(CAA)rulemakings. cooperatives. APPA also participated in several other dockets APPA supported some of these measures,particularly those pertaining to RTOs, including newly proposed metrics for that would provide additional time for compliance,but non-RTO regions and the proposal for a full RTO in the recognized that passage in the Senate was unlikely APPA Southwest Power Pool.APPA's influence is evident in some supported a House-passed bill that would ensure that a of the positive aspects of FERC's June 2012 order on the power plant ordered by the federal govemment to run in Midwest ISO's proposal for a new capacity market. FERC an emergency situation would not be penalized by the ordered that utilities could not be required to purchase Environmental Protection Agency for clean air violations. capacity from this market and rejected the proposed The bill did not pass the Senate in 2012,but is likely to be minimum offer price rule, citing APPAs arguments in support revisited and,with its narrow focus,has at least a chance of of this decision. Senate passage in 2013 or 2014. Several studies and white papers were produced under One other aspect to note is EPA's failure during the EMRI in 2012, including a fact sheet on the high costs of rulemaking process to meet its legal obligations to consider PJM's capacity market,an analysis of the primary financial the adverse impacts of proposed requirements on small arrangements behind power plant construction, and a entities.The vast majority of APPA's members qualify as small review of the New York state capacity market.The latter two entities under the Small Business Regulatory Enforcement studies demonstrated that the primary drivers behind new Fairness Act(SBREFA),which requires EPA to provide them generation and renewable energy are long-term contracts some relief and additional flexibility. However, EPA has barely and utility ownership,not the RTO-operated markets. Two gone through the motions in its consideration of SBREFA's articles were published under EMRI's auspices: "What Drives requirements and in some cases rather flagrantly ignored New Generation Construction?" (The Electncity Journal, them. APPA has developed a good working relationship with July 2012),and"Have Restructured Wholesale Electricity the Small Business Administration's Office of Advocacy, Markets Benefitted Consumers?",co-authored with the as well as the Small Business Committee in the House of Consumer Federation of America(ElecnicityPolicycom, Representatives to address this matter. In 2012,an APPA December 2012).We also completed updates to the annual member testified before the committee on the shortcomings rate comparison and financial analysis of merchant generation of EPAs SBREFA compliance with respect to the Boiler MACT owners in PJM.