6.6. ERMUSR 01-11-2005 - Laserfiche WebLink

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Fh:RC must adopt enforceable protective conditions on the market-based rare authorizations of specific public unlit}' sellers. Such conditions should include the imposition oh cost-based rates and conditions circumscribing the conduct of individual market participants, if such conditions are needed to ensure that ~rholesale rates are just and reasonable and nor unduly discriminator~~ or preferential. Reliance on cost-based rates ensures that ~~~holesale rates will remain ~~~ithin a zone of reasonableness. ~~lternativc conditions can also be crafted, but above a11, conditions must be targeted at the specific market po~~~er problems identified in the local area or region, be achievable within a reasonable period oI~ time, and be enforceable by both The abilityof FERC-[egulated FERC and the affected entities. public utilities t0 sell power 8t 'hhe ability of FERGregulated public utilities ro sell po~ti~er at market-based rates under the market-based rates under the FY.-~ is a privilege, not a right. FPA is a privilege, not a right. Iris not [~ ERC's mission to ensure that its market-based rare mgime benefits the sellers (and the Fnancial institutions that ha~~e lent money to them). Instead, FERCs marker-based rare policies must benefit consumers and their cormnunities by ensuring they are charged on1~~ `just and reasonable" rates, as Congress intended ~~~hen it enacted the FY,a. Conclusion PP~1 and its members arc not advocating the dismantling of each of Attie FERGjurisdictional RTOs now in place.:~or are they advocating the formation of additional KTOs. Rather, they seek to reform the existing R~I~Os, so char they operate to benefit elecu-ic consumers (rather than particular industry participants), and employ market mechanisms only as a means to an end (serving electric consumers), and not an end in themselves. In regions without R"1'Os, ~1PPr1 and its members urge polic~~nzakers to recognize important regional differences and to support. initiatives that promise to deliver substantial regional benefits in areas Stich as transmission planning and construction, market monitoring, and O:~SIS administration. FI/RC should also take steps in regions ~~~ithout RTOs to clarify and enforce open access transmission ntles to ensure that FERCjurisdictional transmission providers are indeed carrying out their obligations to transmission custorncrs. Finally, FhRC must revamp its rnarker- based rate polio' to ensure that electric consumers in both RTO and non- RTO regions pay only just and reasonable rates for electric generation. 26 Restructuring at the Crossroads: FERC Electric Policy Reconsidered