Top Energy Regulator’s Exit Is Chance for Obama to Reverse Deregulation Fiasco, Put Families Over Power Company Profits

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Top Energy Regulator’s Exit Is Chance for Obama to Reverse Deregulation Fiasco, Put Families Over Power Company Profits

Statement of Tyson Slocum, Director, Public Citizen’s Energy Program

WASHINGTON - Today's announcement that Joseph Kelliher, chairman of the powerful
Federal Energy Regulatory Commission (FERC) and a commissioner since
2003, is stepping down provides President-elect Barack Obama with an
opportunity to fix an agency with a history of promoting deregulation
and power company profits at the expense of fair energy prices to
American families. Under Kelliher's watch, FERC continued the failed
policy of deregulation, resulting in consumers paying billions of
dollars more in home energy costs than if markets under FERC control
had been properly regulated.

Kelliher, who served as the Energy Department's liaison to Vice
President Dick Cheney's infamously corporate-biased Energy Task Force
prior to becoming FERC commissioner, consistently overlooked the
agency's top statutory mandate: to ensure that all electric rates be
"just and reasonable."As a result, Kelliher's FERC has undergone
ongoing criticism by states and consumer groups for its backward
priorities.

At a time when officials such as former Fed chairman Alan Greenspan
have concluded that federal deregulation efforts went too far and
resulted in abuses, Kelliher continued to claim that the policy of
electricity deregulation - pioneered by Enron - has been a success. In
this, he is the last man standing, nearly alone in his obstinate
insistence that deregulation worked.

A Public Citizen analysis
in October shows that, in states where electricity is deregulated and
wholesale markets are under FERC jurisdiction, households pay prices 50
percent higher than in those states that remain fully regulated. FERC's
failure to regulate the electric rates that power plant owners,
investment banks and others that buy and sell electricity contracts
charge allows these sellers ample opportunities to manipulate markets
and price-gouge consumers. As a result, adequate competition does not
exist in America's electricity markets. Many states stopped
deregulation or reregulated because of these problems.

Public Citizen urges President-elect Obama to appoint a chairman
with consumer advocacy experience who will pledge to end the disastrous
deregulation experiment, marking a return to well-regulated markets
where all electric rates are "just and reasonable."

The importance of having a consumer-focused FERC chair not only will
ensure that consumers will be free from being price-gouged, but will
facilitate the implementation of successful climate change legislation.
Some approaches to lowering greenhouse gas emissions rely on
market-based approaches such as cap and trade, which requires
transparent, competitive wholesale electricity markets to send the
correct price signals to reduce carbon emissions. But FERC's continued
promotion of market concentration and stagnation would render any
market-based approach to climate change a failure before it starts.

 

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Public Citizen is a national, nonprofit consumer advocacy organization founded in 1971 to represent consumer interests in Congress, the executive branch and the courts.

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