What is standard market design?
Standard market design (SMD) is a FERC proposal that would fundamentally restructure the Northwest s electricity system. The changes would replace current structures for providing electricity to the public on an at-cost basis with a system seeking to rely on market rates for buying and selling energy as well as transmission access. It would induce utilities to purchase electricity transmission rights on the open market. Practically speaking it would force trading into the short-term, price volatile market and away from the predictable and low cost long-term transmission contracts that has been the norm in the Northwest. The changes would also open the Northwest power system to the same type of market abuses that astronomically increased power costs and led to the California failure in 2000 and 2001.
