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Conn. Attorney General Alleges Generator "May Have" Exercised Market Power in Capacity Market
George Jepsen, Attorney General for the State of Connecticut, petitioned FERC to investigate the results from the 2017-18 ISO New England Forward Capacity Auction, alleging that a generator, "may have exercised market power."
The AG said that Energy Capital Partners II, LLC's, "decision to withhold 1500 megawatts of capacity," by withdrawing its Brayton Point plant from the auction, "created a shortage for FCA-8 and triggered the Tariff rules concerning 'insufficient competition.'"
"ECP may have exercised market power in the forward capacity market when it became a pivotal supplier into FCA-8 and thereafter withheld 1500 MW of capacity from the auction by permanently retiring Brayton Point," the AG alleged
The AG alleged that, "On December 20, 2013, ISO-NE offered Brayton a full cost of service 'reliability-must-run' ('RMR') contract. An RMR contract offers a generation owner full cost of service compensation, including a return of all expenses and an authorized return on the investment of approximately 12 percent."
The AG further alleged that, "ECP did not respond to ISO-NE's offer until after the Commission issued its orders in Dockets Nos. EL14-7 and ER14-463 concerning the administrative default rate that would apply if the auction failed due to insufficient competition. The Commission issued those orders on January 24, 2014. On that date, ECP knew that it had the unilateral ability to move the 'clearing' price from $3.15 in FCA-7 to the $7.025 in FCA-8. The next business day, ECP informed ISO-NE that it would reject the RMR agreement and withhold Brayton Point's 1500 MW from the auction."
FERC Docket No. ER14-1409
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April 10, 2014
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Reporting by Paul Ring • ring@energychoicematters.com
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