FTC FILES COMMENT WITH FERC ON COMPETITION IN WHOLESALE ELECTRICITY

On April 18, 2008, the Federal Trade Commission (“FTC”) filed a comment with the Federal Energy Regulatory Commission (“FERC”) regarding an earlier notice of proposed rulemaking (“NOPR”) that sought to provide consumers incentives to reduce power use. FERC proposed to provide consumers with incentives to reduce power use when electricity is scarce and expensive at the wholesale level.
The FTC initially asked FERC to make changes to its advanced notice of proposed rulemaking (“ANOPR”) which was filed in September 2007. In its earlier comment on FERC’s ANOPR, the FTC observed, “Although we commend FERC for its proposals to remove regulatory obstacles to vigorous competition and efficient resource allocation in electricity markets and for the specific changes proposed in the ANOPR, we also encourage FERC to improve the proposals.”

A major long term goal for FERC is to strengthen competition in organized electric power markets to increase economic efficiency, improve electric system reliability, and enhance consumer welfare. The FTC’s comment asked FERC to facilitate improvements in pricing and direct load control – collectively known as “demand response” to achieve FERC’s long term goal. The comment concludes that “[w]e believe that a focus on removal of regulatory obstacles to efficient real-time price signals and demand response at the federal and state levels can be an important step toward appropriate, efficient reliance on conventional price mechanisms to handle scarcity and guide investment.”

Robert Doyle
(202) 589-1834
rdoyle@dbmlawgroup.com