APPA's Sue Kelly testifies on FERC process and wholesale electricity markets

June 4, 2015

Press Release

Washington D.C., June 4, 2015—American Public Power Association (APPA) President and CEO Sue Kelly testified today at the U.S. House Energy & Commerce Committee’s Subcommittee on Energy & Power hearing, “Discussion Draft on Accountability and Department of Energy Perspectives on Title IV: Energy Efficiency.”

APPA noted that it appreciates the Subcommittee’s acknowledgement that wholesale electricity markets have serious problems that need to be addressed. In her written testimony, Ms. Kelly suggested edits, additions and deletions to provisions of section 4221 pertaining to evaluating and improving wholesale electricity markets. APPA stands ready to work with the Subcommittee to improve this section.

APPA has articulated concerns over the past 10 years about many of the wholesale electricity markets operated under FERC authority by certain Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs) — referred to collectively as “RTOs.” Many of them are not in fact markets, but rather are highly complex administrative constructs with myriad rules, which change with alarming frequency. APPA’s members in many regions must face the day-to-day complexity and costs of operating under these constructs. APPA is also concerned about the time-consuming and resource-intensive stakeholder processes and the lack of transparency in the governance processes of some RTOs.

In terms of improving transparency in FERC investigations (section 4212), electricity consumers rely on the FERC’s enforcement personnel to protect their interests. Any additional protections for the subjects of investigations that Congress adds should not adversely affect the ability of FERC’s enforcement staff to protect the public from market manipulation.

APPA appreciates the Subcommittee’s intent in proposing section 4231, which would modernize the Public Utilities Regulatory Policies Act (PURPA), but APPA cannot support it in its current form. As drafted, the section would preclude many public power utilities from being able to seek relief from mandatory purchase obligations. APPA looks forward to working with the Subcommittee on this section.

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