Senate Energy Committee Should Press FERC Chair Nominee on Consumer Protection Plans

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Senate Energy Committee Should Press FERC Chair Nominee on Consumer Protection Plans

Advocacy Groups Write Letter to Committee Chairman Wyden Naming Four Demands for Incoming FERC Chair

WASHINGTON - President Barack Obama’s nomination of former utility regulator and consumer advocate Ron Binz to chair the Federal Energy Regulatory Commission (FERC) is a welcome development. The Senate Energy and Natural Resources Committee should question Binz to ensure his support of several key consumer protection issues before confirming him, a group of consumer and labor advocacy groups wrote to Committee Chairman Sen. Ron Wyden (D-Ore.) and Ranking Member Sen. Lisa Murkowski (R-Alaska) today.

The groups wrote that they “urge a new FERC chairman who is committed above all to protecting consumers by ensuring that all electric rates are just and reasonable, and that markets are transparent and accountable to consumers.”

The letter lists four key reforms that Binz should support:

1. The new chair should create a consumer advocacy office at FERC, with a director appointed by the president, adequate funding, political independence and the ability to conduct investigations and intervene on behalf of consumers. The office should be able to provide funding to consumer groups to facilitate their participation in FERC proceedings.

2. The new FERC chair should increase transparency and accountability of private market monitors – known as regional transmission organizations – that have significant influence over energy rates but are more beholden to financial firms, power generators, utilities and retail service providers than to consumers.

3. FERC should undertake a comprehensive investigation of the “justness and reasonableness” of wholesale power supply prices in the centralized markets administered by regional transmission organizations. FERC rejected a widely supported proposal for this kind of investigation in 2007 under President George W. Bush.

4. The chair should review the way incentive rates are used to encourage transmission investment and ensure that the incentives are not increasing costs to consumers without improving system reliability.

Binz’s background suggests that he has an inclination to support consumer protections and not shy away from taking a stand on important issues.

The letter was signed by Consumers Union; National Consumer Law Center, on behalf of its low-income clients; Public Citizen; Utility Workers Union of America, AFL-CIO; Citizens’ Utility Board of Oregon; Low Income Utility Advocacy Project of Illinois; Ohio Partners for Affordable Energy; Public Utility Law Project of New York, Inc.; Texas Legal Services Center; Texas Ratepayers’ Organization to Save Energy; TURN-The Utility Reform Network (California); and Virginia Citizens Consumer Council.

The letter is available here.

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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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