FERC’s Market-Power Test: First, Do No Harm
Why a new market-power screen—accounting for the relationship between customers and suppliers in the wholesale marketplace—is a necessity.
The philosophy of "first, do no harm" has served the medical profession well for more than 2,000 years. Today, it may be equally good advice for FERC as it seeks to create fair and accurate screens to determine who does and does not have market power. One of the two interim screens FERC is using to evaluate applications for market-based rate authority may create a large number of false positives—power suppliers judged to have market power when in reality they do not. To remedy this, FERC should add a new market-power screen based upon an analysis of the actual relationship between customers and suppliers in the wholesale marketplace.
