A number of top House Democrats, including Minority Leader Richard Gephardt (D-MO), recently urged Secretary of Energy Spencer Abraham to initiate a rulemaking at the Federal Energy Regulatory Commission to re-impose cost of service prices for all wholesale power sales in California and the other 12 states in the Western Systems Coordinating Council, including full refunds back to October of last year.
“Mr. Secretary, we recognize that FERC is an independent commission and you are not authorized to take direct action on pricing matters,” the House Democrats write in their letter to Abraham. “However, there is one step you can take that would force the Commission to do its duty to ensure just and reasonable prices,” the letter continued. The letter points out that under section 403 of the Department of Energy Organization Act, the Secretary of Energy is authorized to initiate rulemakings at FERC and set time limits for final action by FERC.
“There is nothing novel about section 403 authority, which has been available to the Department [of Energy] since its creation and used as recently as November 15, 2000,” the letter says. “You can implement our request with no change to current law and without changing the principles of the Federal Power Act,” the members write. Should market conditions change in the future, a later FERC could determine that cost-of-service rates are no longer necessary to ensure just and reasonable prices, the letter notes. “Our proposal also avoids the dangers inherent in Congress attempting to devise new standards through new law which would have to be tested in the courts,” the letter states.
“Mr. Secretary, it is regrettable that FERC did not take aggressive action earlier, in time to avert problems in western electricity markets this summer that now appear inevitable. However, since FERC refuses to fulfill its statutory duty to ensure just and reasonable prices, we urge you to use your power to direct it to do so. Without this action, further chaos will ensue and California and other western consumers will continue to pay the price,” the members wrote.
The letter, sent to Abraham on May 4, was signed by 44 Democratic members, including Gephardt and Reps. Martin Frost (TX), John Dingell (MI), Rick Boucher (VA), Rosa DeLauro (CT) and Ed Markey (MA).
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