Statements on Introduced Bills and Joint Resolutions

Floor Speech

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - February 25, 2008)

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By Mr. SANDERS (for himself, Ms. SNOWE, Mr. KERRY, Ms. COLLINS, Mr. KENNEDY, and Mr. LEAHY):

S. 2660. A bill to amend the Federal Power Act to ensure that the mission and functions of Regional Transmission Organizations and Independent System Operators include keeping energy costs as low as reasonably possible for consumers, and for other purposes; to the Committee on Energy and Natural Resources.

Mr. SANDERS. Mr. President, today I am introducing legislation to help protect consumers from high electricity prices that have followed deregulation of electricity markets. I am honored to have many of my colleagues joining me in offering this legislation--Senator SNOWE, Senator KERRY, Senator COLLINS, Senator KENNEDY, and Senator LEAHY.

Market pricing of electricity promised to bring lower costs to consumers. Unfortunately, consumers in organized market regions--those that have a Regional Transmission Organization or Independent System Operator, RTOs or ISOs as they are called--are experiencing just the opposite: substantial, across-the-board problems with spiraling costs, unaccountable governance, and a chronic lack of oversight. Increasingly, RTOs/ISOs are adopting questionable, unproven, and expensive market mechanisms, and there seems to be little interest at the Federal Energy Regulatory Commission, FERC, or the RTOs/ISOs to question any of the economic theories behind these mechanisms. I note that on February 21, 2008, FERC finally took a step toward acknowledging that the markets are not working by issuing a proposed rule that would address some concerns. I believe, however, that the legislation I am introducing today will focus FERC on consumer issues, which were not adequately addressed in the proposed rule.

The goal of lowering costs to consumers has been lost in the race to create competitive electricity markets. In fact, something as simple as keeping costs to consumers as low as reasonably possible is not even part of the mandate, or mission statement, of any of the Nation's ISOs or RTOs! In New England, we have seen what can happen--there have been several instances in which ISO-New England has implemented expensive market mechanisms, over the objection of significant segments of electric stakeholders, without either conducting a cost-benefit analysis or comparing the costs of the proposed initiative with alternative means of achieving the desired results.

Showing the strong interest in this issue in the New England region, the legislation is supported by the Northeast Public Power Association, the Vermont Public Power Supply Authority, the Burlington Electric Department, Kennebunk Light & Power District, the Massachusetts Municipal Wholesale Electric Company, Connecticut Municipal Electric Energy Cooperative, the Connecticut Office of Consumer Counsel, and the Pascoag Utility District. The Ohio Consumers' Counsel, the Maryland Office of People's Counsel, Electricity Consumers Resource Council, and the Utility Consumers' Action Network support the legislation as well.

The legislation I am introducing today would refocus FERC on the consumer cost impacts of RTO/ISO actions. Consistent with existing law, the bill makes explicit that, when FERC considers the lawfulness of RTO/ISO rates, it must assess whether those rates will ensure that consumer costs are as low as reasonably possible consistent with the provision of reliable service. Also, in recognition of the uniquely important roles played by RTOs and ISOs, this bill requires FERC to make both goals--cost minimization and reliability--a part of each RTO or ISO's mission. These changes clarify and amplify existing law as applied to these important organizations, but do not alter, diminish, or imply an absence of similar requirements with respect to other public utilities regulated by FERC.

I believe these simple, commonsense issues, when posed by FERC to an RTO/ISO that is seeking approval for a rate, charge, or rule, will instill a much stronger sense of cost accountability. The bottom line, as I see it, is that this simple bill will likely yield substantial benefits for consumers and for many regional economies.

I urge my colleagues to join me in pushing for adoption of the Consumer Protection and Cost Accountability Act.

Mr. President, I ask unanimous consent that the text of the bill be printed in the RECORD.

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