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Consumer-owned utilities contest FERC compliance order on ISO-NE minimum offer price rule

From the March 20, 2013 issue of Public Power Daily

Originally published March 20, 2013

By Robert Varela
Editorial Director

A coalition of consumer-owned electric utilities (including APPA) has asked the Federal Energy Regulatory Commission to rehear its Feb. 12 order approving a compliance filing by ISO New England on implementation of its minimum offer price rule in its "Forward Capacity Market." The request for rehearing is a protective move; consumer-owned utilities in New England already have asked the courts to overturn an earlier FERC order denying a self-supply exemption to the ISO’s minimum offer price rule, but the commission has argued that their appeal was premature.

The March 14 request for rehearing reiterates arguments that the commission lacks jurisdiction and that neither FERC nor ISO-NE has established that preventing price-taking offers from self-supply is necessary to ensure just and reasonable rates.

The consumer-owned utilities also argue that the Feb. 12 order errs in finding that consumer-owned entities' right to choose their capacity resources turns on other stakeholders’ choices. The commission held that the ISO was not obligated to propose a self-supply exemption because New England stakeholders had failed to conclude that action was necessary. That a diverse group of stakeholders did not support an exemption proves nothing, the consumer-owned utilities said. "In any case, the Commission may not delegate to New England’s stakeholders its statutory obligation to ensure that rates are just, reasonable and not unduly discriminatory," they said.

Joining in the rehearing request are APPA, Massachusetts Municipal Wholesale Electric Co., New Hampshire Electric Cooperative, Northeast Public Power Association and National Rural Electric Cooperative Association.

A separate request for rehearing was filed by a group of Massachusetts public power utilities: Braintree Electric Light Department, Hingham Municipal Lighting Plant, Reading Municipal Light Department, Taunton Municipal Lighting Plant and Danvers Electric Division. They argued that ISO-NE’s system unreasonably discriminates against generating capacity developed by consumer-owned utilities by inevitably requiring that consumer-owned utilities undergo project-specific review of their bids, "notwithstanding the absence of any conceivable question that the bid price for such capacity is based on the bidder’s actual costs."


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