Hearing of the Energy and Power Subcommittee of the House Energy and Commerce Committee - Discussion Draft on Accountability and Department of Energy Perspectives on Title IV: Energy Efficiency

Hearing

Thank you Chairman Whitfield and Ranking Member Rush for holding this hearing,
which I understand to be the last of its kind on the Majority's Architecture of Abundance
discussion draft legislation.

As we begin wrapping up these legislative hearings, I want to commend Chairman
Whitfield and Chairman Upton. Regardless of whether I agree or disagree with all of the
policies put forth, the Chairmen and Majority staff deserve credit for putting forward these many
proposals and for working with us to put together these legislative hearings. We continue to
want to work with you to try to construct energy legislation that can garner support from a
majority of each of our caucuses.

While I believe it is possible to get there, it's important to note that we clearly have a
long way to go. I have already voiced my opposition to the efficiency draft because I believe
that, in its current form, it would actually result in a net increase in energy consumption, but I'm
glad we'll finally get to hear DOE's views on the language today.

The "accountability" title that is the primary topic before both today's and tomorrow's
panels, includes proposals that range from the relatively innocuous to the absolutely disastrous.
In particular, I am strongly opposed to the section regarding FERC investigations which
to me defies all logic by casting market manipulating big banks and hedge funds as victims,
while handcuffing FERC investigators tasked with protecting energy ratepayers.

The provision asks us to believe that JP Morgan Chase --which agreed to a $410 million
settlement in 2013-- is really a victim, rather than the California ratepayers who were
defrauded. It wants us to be concerned about "just and reasonable" treatment for FERC
enforcement order subjects like Barclays Bank and the Powhatan Energy Fund, rather than
preventing market manipulation to ensure "just and reasonable" rates for consumers of
electricity, a regulated commodity. I don't understand the Majority's rationale, but I do know
that its enactment would undermine confidence in the fairness of energy markets and, ultimately,
the ability of those markets to function at all.

It's clear from the inclusion of a "Market Reforms" section in the draft that the majority
already has concerns with the functioning of the regional electricity markets. What's not clear is
exactly what problems the language is attempting to solve or whether it would solve
them. Nonetheless, I look forward to hearing from our expert witnesses with extremely
divergent views of electricity markets. This is a complex but critical issue that should be the
subject of multiple oversight hearings and vigorous debate.

Another matter that the Committee should examine more closely before legislating is
implementation of PURPA Section 210, which laid the early groundwork for wholesale
electricity competition and the growth of renewable energy. Ten years ago, this Committee and
Congress significantly reformed the law to essentially say that if FERC found that fair and robust
competition existed in a given region, then utilities within that region no longer had to sign
mandatory power purchase agreements with qualifying facilities. That reform seems to have
worked. Perhaps there are tweaks to be made and I am willing to address demonstrated
problems. However, the discussion draft goes way too far by essentially deeming competition to
exist even where it doesn't, completely flipping the burden of proof and undoing the simple, fair
and elegant agreement we enacted in EPACT 05.

In closing, I hope that we will take the time to try to work through these issues and not
rush to some meet some arbitrary deadline. While nothing is ever guaranteed, I think it is
possible that, working together, we can move from the architectural phase to the construction of
broadly bipartisan energy legislation that could be enacted before the end of this
Congress. Thank you.

Source