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Electric Competition


National policy for many years has been, and continues to be, to foster competition in wholesale power markets. In each major energy bill over the last few decades, Congress has acted to open up the wholesale electric power market by facilitating entry of new generators to compete with traditional utilities. As the third major federal law enacted in the last 30 years to embrace wholesale competition, the Energy Policy Act of 2005 strengthened the legal framework for continuing wholesale competition as federal policy for this country. The Commission has acted quickly and strongly over the years to implement this national policy.

The Commission's core responsibility is to "guard the consumer from exploitation by non-competitive electric power companies." The Commission has always used the following two general approaches to meet this responsibility:

    Regulation - was the primary approach for most of the last century and remains the primary approach for wholesale transmission service.

    Competition - has been the primary approach in recent years for wholesale generation service.

Advances in technology, exhaustion of economies of scale in most electric generation, and new federal and state laws have changed the Commission's views of the right mix of these two approaches. The Commission's goal has always been to find the best possible mix of regulation and competition to protect consumers from the exercise of monopoly power.

      Timeline          
      2009   2008   2007   2006 2005 1999 1996 1992
      December 17, 2009
    FERC issued Order No. 719-B PDF denying rehearing of Order No. 719-A, affirming its basic determinations regarding demand response and pricing during periods of operating reserve shortages in organized markets. Order No. 719-A affirmed in part and granted in part rehearing of Order No. 719 that established reforms to improve the operation of organized wholesale electric power markets.
    July 16, 2009
    FERC issued Order No. 719-A PDF reaffirming regulations that strengthen the operation and improve the competitiveness of organized wholesale electric markets through the use of demand response and by encouraging long-term power contracts, strengthening the role of market monitors and enhancing regional transmission organization (RTO) and independent system operator (ISO) responsiveness.
    October 17, 2008
    FERC issued Order No. 719 PDF finalizing regulations that strengthen the operation and improve the competitiveness of organized wholesale electric markets through the use of demand response and by encouraging long-term power contracts, strengthening the role of market monitors and enhancing regional transmission organization (RTO) and independent system operator (ISO) responsiveness.
    February 22, 2008
    FERC issued a Notice of Proposed Rulemaking PDF seeking public comment on new rules to improve operations in organized electric markets, boost competition and bring additional benefits to consumers. The proposed reforms are designed to ensure just and reasonable rates and to remedy undue discrimination and preference and improve wholesale competition in organized markets. They address demand response and market pricing during a period of reserve shortage, long-term power contracting, market-monitoring policies, and responsiveness of regional transmission operators and independent system operators to stakeholders and customers.

    June 22, 2007
    FERC issued an Advance Notice of Proposed Rulemaking PDF seeking public comment on potential reforms to improve operations in organized wholesale power markets. The proposal will help the Commission identify challenges facing competitive wholesale power markets in RTOs and ISOs and propose workable solutions in those areas in which the Commission has jurisdiction. Specifically, the Commission sought comments on (1) the role of demand response in organized markets, (2) facilitating opportunities for long-term power contracts, (3) strengthening market monitoring, and (4) the responsiveness of RTOs and ISOs to customers and other stakeholders.

    February 15, 2007
    FERC issued Order No. 890, a final rule reforming its decade-old open-access transmission regulatory framework that will ensure transmission service is provided on a nondiscriminatory and just and reasonable basis, as well as provide for more effective regulation and transparency in the operation of the transmission grid.
    August 2006
    FERC staff issues the Assessment of Demand Respond & Advanced Metering PDF as required by EPAct 2005.

    July 20, 2006
    FERC issues two major orders stemming from EPAct 2005. In Order No. 681 PDF FERC finalized guidelines for independent transmission organizations to follow in developing proposals to provide long-term firm transmission rights in organized electricity markets. In Order No. 679 FERC finalized rules to bolster investment in the nation’s aging transmission infrastructure, and to promote electric power reliability and lower costs for consumers, by reducing transmission congestion.
    December 16, 2005
    FERC issues Order No. 668, which amended FERC’s regulations to update the accounting requirements for public utilities and licensees, including RTOs and ISOs.
    August 8, 2005
    The President signed into law the Energy Policy Act of 2005, which reaffirmed a commitment to competition in wholesale power markets as national policy. Act of 2005 (EPAct 2005)
    December 20, 1999
    FERC issued Order No. 2000 PDF which encouraged transmission utilities, including those that were not public utilities, to join a RTO.
    FERC issued a series of orders designed to foster competition through better access to transmission facilities, namely Order No. 888. October 24, 1992
    The President signed into law the Energy Policy Act of 1992 PDF, which encouraged FERC to foster competition in the wholesale energy markets through open access to transmission facilities.
     
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CONTACT
Russell Profozich
Telephone: 202-502-6478
Email: russell.profozich@ferc.gov

Elizabeth Rylander
Telephone: 202-502-8466
Email: elizabeth.rylander@ferc.gov
 
QUICK LINKS
RM07-19-000 Notice Of Proposed Rulemaking (NOPR) AD07-7-000 Advance Notice Of Proposed Rulemaking (ANOPR) Conferences
  • May 21, 2008 - Demand Response in Organized Electric Markets (AD08-8) - Event Details
  • May 8, 2007 - Examine the state of competition in wholesale power markets (AD07-7) - Event Details
  • April 5, 2007 - Review the Commission's general policies regarding market monitoring (AD07-8) - Event Details
  • Febuary 27, 2007 - Competition In Wholesale Power Markets (AD07-7) - Event Details
  • January 25, 2006 - Demand Response and Advanced Metering Conference (AD06-2) - Event Details



Updated: July 15, 2010