The Federal Energy Regulatory Commission (FERC) has revised its policy on potential abuses by affiliated power marketers, lifting restrictions on marketing transactions involving affiliates that do not have captive customers. The changes stem from a case involving USGen Power Services, L.P., an affiliate of Pacific Gas & Electric Co. (PG&E) that sought to market power to and from affiliated and nonaffiliated entities, including exempt wholesale generators (EWGs) and power marketers, but not to PG&E (Docket No. ER95-1625-000).
In an earlier case, the FERC had imposed three conditions on a power marketer that sought to market and/or broker power from affiliated qualifying facilities and EWGs: 1) first offer power to the affiliated companies, 2) make the arrangement nonexclusive, and 3) simultaneously make publicly available to nonaffiliates any information that shared with the affiliates [Southern Co. Services, Inc., 72 FERC ¶ 61, 324 (1995), reh'g. pending]. USGen argued that the requirements should apply only when the affiliate it is providing with the service is PG&E.
The FERC agreed, saying that if a nontraditional affiliate like USGen does not market or broker the power of an affiliate with captive customers like PG&E, there is no potential to favor stockholders at the expense of captive customers. It enjoined USGen not to market or broker power to or from PG&E absent a future rate filing; if that occurs, the FERC would address the restrictions needed to protect captive customers at that time.