It may be viral marketing, or it may be happenstance. But it is interesting that proponents of the single-price auction that regional power markets operate are having to fight off attacks right now in two states: New York and Texas.
The American Public Power Association has waged a campaign for a couple of years against some of the ways regional markets are structured. The single-price auction, in which all suppliers receive the highest successfully bid price – commonly from natural gas-fired power -- has been the major object of APPA's complaint, which has been joined by the big industrials in the Electricity Consumers Resource Council as well as, at times, a slew of general consumer-interest groups.
APPA has been almost smashingly unsuccessful in persuading federal power regulators that regional markets' basic structures are inimical to consumers. Still, groups that represent power suppliers – notably the Compete Coalition and the Electric Power Supply Association -- have waged their own counter-campaigns with a good deal of energy.
Now power generators and competitive interests are geared up in New York and Texas as legislators there examine market criticisms and contemplate trying to order changes to the single-price auction model. In New York, Assemblyman Richard Brodsky wants the New York ISO to change to a descending clock, pay-as-bid auction overseen by the Public Service Commission, to lower prices for consumers. Suppliers have said many times that changing the auction would not really result in lower prices and would not send good signals for new supply. Brodsky is having a hearing on the issue this week.
In Texas, a bill from Representative Sylvester Turner says the single-price, highest-bid auction "is harmful to the availability of just and reasonable electric rates." Turner's bill would make the price reflect the average price of the cost of all forms of energy bid into the market. This would resemble the proposal APPA made recently. A variety of industry interests in Texas and New York say the efforts there are not on any fast-tracks to passage. Neither is APPA's proposal. But the issue does not go away.
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