Energy Regulation April 2008 Updates

FERC Affirms And Clarifies New Market-Based Rate Policy

FERC, acting on rehearing of its market-based rate rulemaking proceeding Order No. 697, largely affirmed its earlier rulings, including its decision to utilize a regional approach for the triennial market power analysis (separating the nation into six geographic regions); the adoption of horizontal and vertical power analyses; the use of a balancing authority area or the regional transmission organization/independent system operator market as the default relevant geographic market; and the codification of restrictions on affiliate abuse in the regulations. FERC stated that this will strengthen wholesale power markets and protect customers from exploitation in those market.