Perspective

Some want a tighter grip on generators, but FERC should steer clear.

The turmoil surrounding the California electricity crisis has prompted calls for the Federal Energy Regulatory Commission (FERC) to reexamine its approach to analyzing market power and granting market-based rate authority to wholesale generators.¹

In a series of dissenting opinions,² Commissioner William Massey has waged a campaign against what he calls the agency's "outdated and unreliable" hub-and-spoke analysis³ for assessing market power.

It is now clear that this issue will become part of the regulatory agenda for the newly reconstituted Commission, because Massey's new colleagues, Chairman Pat Wood, III and Commissioner Nora Mead Brownell, also have expressed interest in this initiative.⁴ Yet this debate should not occur in isolation from the commission's global initiatives to promote open-access transmission and competitive markets for wholesale power.

The Larger Agenda

Commissioner Massey would have FERC place the issue at the top of its agenda.⁵ But does it merit that level of priority?

In short, the emergency is over. With its mitigation orders, the commission has already acted politically and substantively to address the crisis-real or perceived-in wholesale electric power markets.