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Letter to Federal Energy Regulatory Commission Chairman Joseph T. Kelliher

Date: June 23, 2006
Issues: Energy


Dear Mr. Chairman:

We are writing to express our deep concern with the Federal Energy Regulatory Commission's (FERC's) approval of a Forward Capacity Market (FCM) for the New England market. Although we recognize that specific regions of New England require additional capacity, we believe that the agreement fails to reflect the diversity of the New England market, and disproportionately burdens ratepayers in the State of Maine.

On July 5th 2005, we wrote to you regarding the Locational Installed Capacity Proposal (LICAP), stating that "It is imperative that FERC consider alternative proposals that will allow our region to meet its electricity needs in a more cost-effective and responsible way." Regrettably, FERC's decision on June 15th, 2006, will cause rate increases of an estimated 6% for Maine's residential electric consumers and 10% for Maine's medium and large commercial and industrial electric consumers. The Maine economy is particularly susceptible to electricity costs, and these increases will have a negative impact on family budgets and the overhead costs for Maine businesses.

According to the most recent data from the Energy Information Agency (EIA), in 2004 Maine produced over 19,000,000 megawatt hours, and consumed less than 12,400,000 in megawatt hours. Although Maine continues to be a leader in promoting electricity generation, our ratepayers pay nearly 27% more for electricity than the national average. The agreement by FERC fails to account for Maine's electricity generation and, furthermore, will only exacerbate the price disparity between Maine and much of the rest of the country, especially those areas for which we compete for industrial jobs.

This decision is another instance in which Maine ratepayers are being unfairly required to pay for infrastructure deficiencies in other, more affluent, parts of New England. Not only does this represent unsound energy policy, but it also places an onerous economic burden on those who can least afford it.

We therefore respectfully request that you and your fellow commissioners reevaluate the decision and consider the serious ramifications to the people and businesses of Maine.

Sincerely,

OLYMPIA J. SNOWE, United States Senator
SUSAN M. COLLINS, United States Senator

http://snowe.senate.gov/news.htm

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