An Analysis of FERC’s Hub-and-Spoke Market-Power Screen

• Its geographical market definition accounts only for a factor that is no longer relevant and for none of the factors that matter in a competitive market. • Its use of uncommitted-shares registers more market power when the market itself is more competitive and less market power when it is less competitive. Thus it often reads in reverse the impact of the market on the applicant. • It takes no account of the central market-power problem of electricity markets: the inelasticity of demand. • It takes no account of the thousand-fold fluctuations in supply elasticity that concentrate and intensify market power during a few crucial hours. • It takes no account of suppliers becoming pivotal to the market. • It would allow a single supplier to pass although it possessed enough market power to single-handedly double the average year-round price in PJM. • It would allow multiple suppliers to pass although they would be capable of destroying any current power market.