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Energy Regulator Gives Its Blessing to Market Manipulation

Statement of Scott Nelson, Attorney, Public Citizen

Today’s decision by the Federal Energy Regulatory Commission (FERC) doubles down on the commission’s failure to explain its refusal to find market manipulation in a 2015 power capacity auction, in which Dynegy used its market power to establish rates that cost Illinois customers an estimated $100 million.

FERC’s continued insistence that rates resulting from an auction tainted by exploitation of market power must be lawful – just because it was conducted in accordance with approved procedures – is a complete abdication of the agency’s legal responsibility to set aside any rate that is not just and reasonable.

As Commissioner Richard Glick stated in his dissent, FERC must require that “market outcomes be the product of genuine competition, not market manipulation.”

The commission’s failure to carry out its responsibility violates the Federal Power Act.