Comments on FERC’s Standard Market Design Proposals
Paul L. Joskow
Comments of Professor Paul L. Joskow before the US Federal Energy Regulatory Commission on January 10, 2003
I respectfully submit these Comments in response to the Federal Energy Regulatory Commission’s (“Commission”) July 31, 2002, Notice of Proposed Rulemaking (“NOPR”) regarding Network Access Service and Standard Market Design (“SMD”). I strongly support the Commission’s efforts to develop and implement policies designed to break down the remaining barriers to the continued evolution of efficient competitive wholesale electricity markets that span large geographic areas. Such policies are essential so that the ongoing restructuring of the US electricity sector and the expansion of wholesale and retail competition can be successful in bringing long term economic benefits to consumers. There are many features of the proposed Standard Market Design (SMD) that I support since they will help to achieve these goals. They include the basic features of the proposed design for day-ahead and real time markets for energy and ancillary services, including the associated use of Locational Marginal Pricing (LMP), the market power mitigation and market monitoring proposals, and many of the related proposals designed to improve the efficiency of wholesale markets and mitigate discrimination in the pricing and use of the interstate transmission system that impede wholesale and retail competition. I am not submitting Comments on these topics either because I am in general agreement with the thoughtful proposals contained in the NOPR or because remaining issues appear to have already been well developed in the record.