Northeastern politicians declare war on capacity auctions.
Back in the early days of the independent power industry, non-utility generators fought bitterly to overcome barriers that utilities erected to prevent their success. When large industrial users wanted IPPs to come and build inside-the-fence cogeneration plants, utilities tried to retain those customers with special incentive prices—prices that IPPs alleged were cross-subsidized by captive ratepayers. When such tactics failed, some utilities refused to provide backup service to departing customers, forcing them to choose between reliability and the freedom to shop. And when IPPs wanted to wheel power to customers down the road, utilities refused to interconnect them, or charged exorbitant rates for transmission access.
Arguably all these tactics were fair enough in the context of the regulatory compact; utilities spent billions of dollars building infrastructure to serve their state-approved franchises. They couldn’t just surrender the wholesale power business to a bunch of highly leveraged upstarts. In any case, given the contentious history of deregulation in the United States, it comes as no surprise that many IPPs still don’t trust the utility industry to play fair.
Over time that distrust has expanded to include not just regulated utilities, but also FERC-authorized regional transmission organizations (RTO).