Duke Energy will urge federal power regulators proposing comprehensive new market rules to focus on an approach that will improve reliability, transparency and certainty in the emerging wholesale energy industry.

In comments filed with the Federal Energy Regulatory Commission (FERC) regarding the Notice of Proposed Rulemaking, Remedying Undue Discrimination through Open Access Transmission Service and Standard Electricity Market Design, Duke Energy laid out several overarching policy priorities the company considers critically important to an effective standard market design, including:

  • A well-structured regulatory market design that will bolster competitive wholesale energy markets, yielding tangible benefits to customers throughout the United States
  • Non-discriminatory access to the transmission grid that enhances wholesale competition
  • Limited regional variations where appropriate to avoid an overly prescriptive, one-size-fits-all approach
  • The need for FERC to recognize and properly reconcile federal and state jurisdictional boundaries

"Duke Energy provides a unique perspective as both a supplier of reliable transmission service in North Carolina and South Carolina and as a leading manager of merchant generation throughout the United States," said William F. Hall, Duke Energy's senior vice president of energy policy and strategy. "Our integrated approach and nearly 100 years of experience in the energy business is reflected throughout our comments on FERC's standard market design proposal."

"The decisions made now will reverberate throughout our nation's economy for years to come, and we must do our best to get it right." Hall continued.

In its filing, Duke Energy encouraged federal regulators to promptly set and sustain a clear transition path for its standard market design. Such clarity on regional formation and a discernable method of cost recovery for market participants is essential if FERC hopes to achieve its goals, the company insisted.

Among other issues, Duke Energy endorsed a balanced market design that should include non-discriminatory access to the transmission grid through cost-effective regional transmission organizations (RTO). The company also signaled its support for market monitoring measures focused on increasing transparency and preventing the exercise of market power. Sensible oversight, not price mitigation, will help restore market confidence, the company wrote.

"If structured properly, FERC's standard market design proposal could define the path to a robust, open marketplace for affordable wholesale energy. And if implemented through a disciplined, prudent transition, FERC's efforts should jump start much-needed capital investment in our markets, providing the regulatory certainty investors demand." Hall said.

On July 31, 2002, FERC issued its standard market design proposal with comprehensive new market rules intended to transform wholesale power markets throughout the United States. FERC requested comments from stakeholders by Nov. 15, 2002. It has extended the comment period on certain aspects of the proposal -- market design for the West, transmission planning and pricing, issues around state participation, resource adequacy and congestion revenue rights -- to Jan. 10, 2003. Duke Energy expects to file additional comments in January.

A copy of the executive summary from today's Duke Energy filing, along with a fact sheet detailing Duke Energy's positions on specific policies suggested in the FERC proposal are available at www.duke-energy.com.