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Feds limit power prices Source: Boston Herald Publication date: 2000-07-27
Federal energy regulators voted yesterday to place a temporary cap on New England's wholesale power prices, saying there are still flaws in the region's power pool markets that prevent full competition. In a 3-1 vote, the Federal Energy Regulatory Commission said the bid cap of $1,000 per megawatt hour, effective immediately through October, is needed to ensure that the region's electricity consumers are not hit with unreasonable rates when the weather turns hot.
The cap was requested by NSTAR Services Co. and was supported by state regulators in Massachusetts, New Hampshire, Maine and Vermont.
James Hoecker, FERC's chairman, said the cap is only a "Band-Aid" to help stabilize the region's electricity markets as the industry moves toward full competition.
It will kick in during periods when capacity is strained, like on May 8 when New England's hourly spot market price shot up to $6,000 a megawatt hour during a minor heat wave that coincided with repair shutdowns affecting several power plants.
Mike Monahan, a spokesman for NSTAR, said his company, which is positioning itself as a distributor of electricity rather than a supplier, had hoped for a cap that would run through April 1.
"But it at least recognizes the need for these temporary controls, and there's a period to see if this works out," he said.
-- Martin Thompson (email@example.com), July 27, 2000