EPSA Asks FERC to Act Soon on Existential Threats Posed by ZEC Schemes
WASHINGTON, DC – The Electric Power Supply Association (EPSA) today made two filings with the Federal Energy Regulatory Commission (FERC) seeking expedited action to swiftly implement countermeasures in the New York ISO and PJM Interconnection wholesale markets to protect consumers and wholesale power markets from the undisputed negative effects of the Zero Emissions Credit (ZEC) schemes adopted last year by the New York Public Service Commission and the Illinois legislature.
“This month marks EPSA’s 20th anniversary successfully promoting and defending well-functioning competitive wholesale power markets for the benefit of consumers and the economy,” said EPSA President John E. Shelk. “Thus, it is only fitting that EPSA’s first filings of 2017 seek prompt action by FERC to protect wholesale markets from the corrosive effects of ZECs adopted in these two states by implementing a minimum offer price rule (MOPR) for existing units bidding into the New York and PJM markets,” Shelk added.
“The profound adverse economic effects of ZECs and similar out of market payments on the viability and integrity of wholesale markets that millions of consumers depend on is not in dispute. That much is clear from the comments of independent market monitors, the ISOs/RTOs themselves, and those who are market participants every day. FERC itself has also spoken of the challenges posed by growing utilization of out of market payments, which in the case of ZECs to be implemented later this year, will pay a few power plants almost double the market price for electricity compared to their competitors,” Shelk noted.
“FERC and the ISOs/RTOs have been on notice for a long time in the existing dockets in which today’s filings are being made that this is an existential threat to markets that cries out for effective action through a minimum offer price rule on existing units for the capacity auctions used in New York and PJM,” Shelk stressed. “That threat has only grown exponentially with recent state actions. EPSA implores FERC to act before the next capacity auctions given that ZECs are scheduled to begin prior to the delivery years for these auctions.”
While today’s filings relate to FERC-regulated capacity market auctions to lock in commitments for future electricity delivery, the filings note the critical importance of FERC also acting in separate proceedings to address the day-to-day distortions of ZECs on the energy markets that determine which power plants are dispatched to meet demand. Today’s filings also emphasize that, in asking FERC to implement mitigation measures, EPSA is not asking FERC to weigh in on the separate and distinct question, already being litigated in federal court, of whether ZECs are preempted by the Federal Power Act and otherwise unlawful.
Celebrating its 20th anniversary in 2017, EPSA is the national trade association representing leading independent power producers and marketers. EPSA members provide reliable and competitively priced electricity from environmentally responsible facilities using a diverse mix of fuels and technologies. Power supplied on a competitive basis collectively accounts for 40 percent of the U.S. installed generating capacity. EPSA seeks to bring the benefits of competition to all power customers.
