CITIZEN POWER ALLIANCE

Chairman Joseph T. Kelliher's statement on market-based rates for wholesale sales of electric energy, capacity and ancillary services by public utilities.

“Today, the Commission takes final action to reform its market based rate rules to strengthen our regulatory program and prevent the exercise of market power in wholesale power sales. This is the final step in a process that began in May 2006.

By preventing the exercise of market power, this order will strengthen competitive wholesale power markets, especially in the bilateral markets. This order also reflects our commitment to continuous improvement in competitive markets.

We have steadily strengthened the market based rate program in recent years, and FERC has made a series of important changes to this program going back to 2001. This rulemaking is only the latest reform, although arguably the most important.

It is critical that FERC have effective oversight over wholesale power markets in order to guard the consumer from exploitation. I believe we have developed the capacity to effectively regulate competitive wholesale power markets.

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