Volume 02 Number 152
Monday, August 9, 1999
ISSN 1522-7561

Electric Power
National Energy Marketers Association
Approves Principles for Merchant Plants

Anticipating increased competition, the National Energy Marketers Association (NEM) has approved a set of principles designed to help merchant power plants enter the electricity market, NEM president Craig Goodman told BNA Aug. 6.

Merchant power plants are owned by independent power producers and generate electricity expressly for sale on the wholesale electricity market.

"We want as level of a playing field as possible to allow the open market to work," Goodman said. "Competitive generation and power marketers must have open and non-discriminatory access to electric transmission services on a basis comparable to that of the utilities in order for consumers to derive the maximum benefit."

In the principles, approved by the group's executive committee in July, NEM asserted that independent power producers would benefit the market in a variety of ways.

For example, they would build merchant power plants to meet electricity demands whenever and wherever needed, resulting in lower prices for energy and capacity as the new power plants compete for market share.

Developers, rather than captive ratepayers, would have to bear the risk for these new investments, and they would not incur stranded costs that ratepayers would have to pay off.

Furthermore, the increased presence of merchant plants would increase wholesale competition while fostering retail competition.

To help independent power producers realize these benefits, NEM's principles call for:

Copyright © 1999 by The Bureau of National Affairs, Inc., Washington D.C.