EPSA Releases Paper on Rising Costs of New Power Plants

June 23, 2008 // Published as a news service by IHS

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In advance of a briefing on rising power plant costs expected at the June 19 meeting of the Federal Energy Regulatory Commission (FERC), the Electric Power Supply Association (EPSA) released an issue summary, The Rising Cost of New Power Generation Projects Argues for Greater Reliance on Competitive Markets and Procurement.

"We commend FERC for examining the rapidly rising costs of building new power plants in a public meeting this week," said EPSA President and CEO John E. Shelk.

"These rising costs are facing all power suppliers, both those in restructured states and those that have kept a cost-plus rate regulatory system. EPSA submits that rising costs are best managed by competitive suppliers and competitive market forces."

"Federal and state policymakers face critical choices in coming months that will help determine whether consumers are served reliably and affordably in the face of the rising costs of new construction and the expense of operating and improving existing power plants," Shelk said.

"The facts of rising costs to operate existing plants and build new ones underscore the importance of economically realistic capacity markets and other components of how organized wholesale power markets are regulated," Shelk said.

"Those states and regions that continue to rely on vertically-integrated, cost-plus, rate-regulated utilities should move quickly to require competitive power procurement to impose discipline on those utilities so their consumers get the best possible deal."

Source: Electric Power Supply Association (EPSA).