The Electric Power Supply Association (EPSA), which representsindependent power producers, told FERC yesterday that proposedattempts to temporarily halt market-based pricing in New York’spower market this summer — through administrative rates, pricescreens or price caps — should be rejected.

“These actions, while designed to address short-term problems, havelong-term effects on the marketplace, undermining the confidence ofsuppliers, damaging liquidity, limiting investment and, ultimately,threatening reliability,” EPSA said in a protest filed against aproposal by New York State Electric & Gas (see Daily GPI, May 2 and May3). NYSEG and a group of other New York transmission owners areseeking approval of an interim price intervention by the New YorkIndependent System Operator (NYISO) to address problems plaguing thestate’s wholesale marketplace for electricity. Presently, thesemotions call for the implementation of so-called “price screens,” athreshold price requiring market participants to later justify anyhigher-priced sales.

“The more prudent approach would be to stay on course and focuson fixing the problems identified with the NYISO operations anddeveloping immediate (e.g., generation redispatch and demand-sideresponses) and longer-term (e.g. additional investment ingeneration and/or transmission) solutions to the ‘problem’ of pricevolatility,” EPSA said.

“The imposition of administratively determined price screens willdampen market price signals and chill development of generationbecause of uncertain market prices.” A copy of EPSA’s filing can befound on its web site: www.epsa.org

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