Item E-3: Commissioner James Danly Concurrence Regarding ConocoPhillips Company

Commissioner James Danly Statement
June 17,  2021
Docket Nos. ER21-40-000  et al.
Order: E-3

I concur in this order providing guidance to assist market participants in justifying bids above the $1,000/MWh soft price cap in the Western Electricity Coordinating Council (WECC).[1]  The order is clear that this guidance is nothing more than that, and that resources are “not limited to” the list of factors the Commission identifies.[2] 

While I agree, I write separately to underscore that while the three “frameworks” the Commission describes (production cost, index-based, and opportunity cost) each may serve as an appropriate method by which to justify bids above the soft price cap, the Commission is not dictating that only these three frameworks will be acceptable. 

Nor should these three frameworks come to be the only acceptable methods in practice.  I understand the Commission’s desire for more robust showings, as well as its desire to give guidance to generators and other resources on how best to make those showings.  However, I fear that this may, when filings do arrive, end up working to the detriment of generators.  I can foresee generators taking the Commission up on its offer of allowing alternative showings and then having their justifications denied for no more than failing to comply with our non-compulsory frameworks.  I hope the Commission shows fidelity to the spirit of its invitation.

Finally, going forward, I hope my colleagues will evince the same enthusiasm for preventing the exercise of buyer-side market power that we show today in preventing the exercise of seller-side market power.

For these reasons, I respectfully concur.