28 New England Lawmakes Call on FERC to Reject Anti-Consumer Energy Proposal
28 NEW ENGLAND LAWMAKERS CALL ON FERC TO REJECT ANTI-CONSUMER ENERGY PROPOSAL
Proposed Plan Likely to Increase Electric Bills Up to 24%
Representative Edward J. Markey (D-MA), a senior Democrat on the House
Energy and Commerce Committee, sent a letter today from 28 New England lawmakers to the Federal
Energy Regulatory Commission (FERC) urging the rejection of a proposal by the operator of the region's
electricity transmission system for an estimated $13 billion rate hike for New England consumers to
provide payments to owners of electrical power generating stations in the region. The Markey letter,
signed by 28 of the 33 New England House Members and Senators expresses opposition for the ISO New
England's "Locational Installed Capacity Proposal" (LICAP) which would ask New England residents to
pay a special fee to provide financial incentives for these companies build more plants.
"This anti-consumer, anti-competition proposal would give the power generating companies a huge
financial windfall with no guarantee that they would build any new power plants in New England," said
Representative Markey, who organized the letter.
The bipartisan, bicameral letter to incoming FERC Chairman Joseph T. Kelliher was signed by
Representatives Edward J. Markey (D-MA), Thomas Allen (D-ME), Nancy L. Johnson (R-CT)
Christopher Shays (R-CT), Barney Frank (D-MA), Rob Simmons (R-CT), Rosa L. DeLauro (D-CT),
Bernard Sanders (I-VT), James P. McGovern (D-MA), John F. Tierney (D-MA), Richard E. Neal (DMA),
Stephen F. Lynch (D-MA), John W. Olver (D-MA), Michael E. Capuano (D-MA), Martin T.
Meehan (D-MA),William D. Delahunt (D-MA), Michael H. Michaud (D-ME), James R. Langevin (DRI),
Patrick J. Kennedy (D-RI), John B. Larson (D-CT) and Senators Christopher Dodd (D-CT), Jack
Reed (D-RI), Edward M. Kennedy (D-MA), John F. Kerry (D-MA), Lincoln Chafee (R-RI), Joe
Lieberman (D-CT), James M. Jeffords (D-VT) and Patrick Leahy (D-VT). In the letter, the lawmakers
urged the FERC to reject ISO-New England's LICAP proposal, noting that:
"The consequences of this for New England electricity consumers could be serious. It has been
estimated that the typical Boston area residential customer's electric bill would increase by a
projected 21% - 24% over the next 5 years because of the LICAP payments that would go to
power plant owners under the ISO's proposal. A similar 21%-24% increase is projected in
Connecticut as well."
The letter, signed by 28 members of the House and Senate asserts that both consumers and small
businesses will be hit with the cost of the new industry incentives scheme which will not necessarily
guarantee the construction of new plants. The lawmakers noted that:
"Commercial and Industrial customers likely will also see very significant price increases.
Because the LICAP payments are only "incentives," this money will go to generators without any
requirement or commitment from them to build any power plants. It is therefore entirely possible
that ratepayers could spend $13.5 billion for nothing."
The LICAP plan, first submitted to FERC on March 1, 2004, faces broad opposition across New England.
All six New England governors are opposed to the LICAP proposal and have formally registered their
concerns to the Commission. In addition, every state public utility commission in New England and the
New England Conference of Public Utility Commissioners (NECPUC) has filed strong opposition to this
plan at the FERC. The ISO LICAP Plan has also been broadly opposed by other New England market
participants and stakeholders, including governors, state attorneys general, state consumer advocates,
public utilities, municipal utilities, and investor-owned utilities.
Alternative plans put forth by the Connecticut Municipal Electrical Energy Cooperative and by a group
led by the Connecticut DPUC were refused even for consideration by the FERC. The testimony and
supporting evidence offered by the coalition, as well as similar testimony offered by other parties, were
even stricken from the record of hearings at FERC.
The lawmakers' letter concludes that "unless FERC rejects the ISO plan, this plan and its huge rate
increases will become effective on January 1, 2006. We therefore urge the Commission to reject the ISONE
LICAP plan, and to instead direct ISO-NE to go back and consult with all affected stakeholders to
come up with alternative mechanisms for ensuring that our region's wholesale electricity markets function
properly and that rates charged in such markets are just and reasonable and not unduly discriminatory or
preferential - as required under the Federal Power Act."
For more on Rep. Markey's work to increase energy savings for consumers or a copy of the letter check
out http://www.house.gov/markey/
http://www.house.gov/markey/Issues/iss_energy_pr050705.pdf