Proper authority and market monitoring and mitigation could make the system work.
In the last few years we have watched...
power investigations. By not doing so, FERC discourages utilities from purchasing existing plants instead of building plants or signing long-term contracts. This encourages utilities to pursue options that may not be the lowest-cost options for their regulated customers. The effect is that customers that purchase or would have purchased power from the utility can be harmed by inappropriate constraints imposed by FERC.
As the commission continues to address its policies for determining market power, it must strive not to unreasonably limit the energy procurement options of vertically integrated utilities and their state regulators. More options are in the best interests of customers, because they lead to more affordable and reliable power. And having more options, rather than fewer, is in the best interests of the evolving wholesale markets, because that will lead to a faster evolution to robustly competitive markets.
The commission has the capability to build its market power policies on this principal. EEI urges it to do so.
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