Perspective

Deck: 
Flexibility is key as FERC moves toward a final rule.
Fortnightly Magazine - April 15 2003
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Flexibility is key as FERC moves toward a final rule.

Since the Federal Energy Regulatory Commission (FERC) released its vision last July to standardize the rules governing U.S. bulk power markets, the nation's reaction to this standard market design (SMD) could safely be called swift and fervent.

Industry and stakeholders alike have commented on the commission's proposal. FERC deserves praise for its willingness to listen and respond. Since the original SMD proposal was released, FERC has made several statements that it plans to alter certain aspects. Most recently, the commission declared that the final SMD would not contain the provision that new transmission construction would derive from a competitive procurement process.

EEI, on behalf of its member electric companies, has been among those who have taken a keen interest in the SMD proposal. We have voiced, and will continue to voice, our opinions on this effort. If properly implemented, SMD will lead to greater price transparency and more robust wholesale electricity markets. In the end, this will benefit every electricity consumer.

In January, we presented FERC with our second set of comments on the proposed SMD. We identified the "big picture" issues-regional flexibility, state cooperation, regulatory certainty, infrastructure enhancement, participation by non-jurisdictional entities-and then outlined the goals we felt needed to be achieved within each. Our thoughts on these are listed below. We believe meeting these goals will enable the commission's proposed SMD to achieve its full potential.

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