Letter to Federal Energy Regulatory Commission (FERC) Chairman Joseph T. Kelliher

Letter

Letter to Federal Energy Regulatory Commission (FERC) Chairman Joseph T. Kelliher

Mikulski, Team Maryland Call On FERC to Investigate Unfair Energy Costs

Senator Barbara A. Mikulski (D-Md.) today led the Team Maryland congressional delegation in calling on the Federal Energy Regulatory Commission (FERC) Chairman Joseph T. Kelliher to address growing electricity costs amidst the looming economic crisis. In a letter to Chairman Kelliher, Team Maryland urged him to investigate taking steps to reduce the burden of high energy prices on American families.

"No family in our nation should be forced to choose between paying a home energy bill and putting food on the table for themselves and their children. Families and businesses in Maryland and across the country need immediate relief from rising energy costs," said Senator Mikulski. "Marylanders are feeling stretched and strained. We need real solutions to deal with our growing energy crisis."

The entire Maryland congressional delegation joined Senator Mikulski in signing the letter: Senator Benjamin L. Cardin (D), House Majority Leader Steny H. Hoyer (D) and Congressmen Wayne T. Gilchrest (R), Albert Wynn, Roscoe Bartlett (R), Elijah E. Cummings (D), C.A. Dutch Ruppersberger (D), Chris Van Hollen (D), and John Sarbanes (D).

This is yet another in a series of steps Senator Mikulski is taking to help families struggling with the unstable job and housing markets and the high costs of gas, energy and health care.

The text of the letter is below:

Dear Chairman Kelliher:

We are writing to urge your prompt consideration and resolution of the arguments outlined in the Maryland Public Service Commission (MPSC) complaint that was sent to the Federal Energy Regulatory Commission (FERC) on January 15, 2008. The MPSC complaint discussed some of the negative impacts of wholesale electricity markets, and the rules governing those markets, on Maryland ratepayers.

As you know, Maryland sits in a highly constrained portion of the PJM Interconnection, LLC (PJM) territory. According to the testimony of PJM officials before the MPSC, the region encompassing Maryland faces a critical reliability shortfall by 2012 unless either a major transmission line project is completed or substantial new generation is built. Maryland depends on the operation of the wholesale power markets, which FERC regulates, to provide the "price signals" necessary to develop new generation and transmission. The MPSC explained in its recent report to the Maryland General Assembly that market forces have left Maryland with high wholesale prices and reliability concerns.

We support the MPSC's efforts to address crucial reliability and pricing problems, and we ask for FERC's careful attention to two issues in particular. First, MPSC asks FERC to remove PJM's market rule provisions exempting certain generation resources' energy offer prices from mitigation ("offer capping") during hours when the market is structurally noncompetitive. According to MPSC's complaint, these rules have resulted in higher prices for Maryland rate payers. In addition to requesting prospective changes to PJM's market rules, MPSC asks FERC to refund $87.5 million in wholesale energy charges as a result of these rules. We ask that FERC consider this complaint carefully, and ensure that these markets are providing continued reliability and just and reasonable prices to our constituents.

We believe it is critical that FERC meet its statutory obligations to ensure that the wholesale electricity markets function fairly and in a manner consistent with the interests of ratepayers, especially in states like Maryland that are net importers of electricity. In light of the current economic climate and rising fuel costs, Maryland residents have enough financial burdens. We strongly encourage FERC to thoroughly and expeditiously review the MPSC's complaint and to provide us with an analysis of its findings.