Electric Cooperatives Tell Federal Government to Revise Power Grid Plan
11/27/02

In response to the Federal Energy Regulatory Commission’s (FERC) invitation to comment on its plan to improve wholesale electricity markets, electric cooperatives made their conclusions loud and clear in a filing with the agency in early November: the plan must be re-focused if it is to benefit electric cooperative consumers.

Electric cooperatives were not alone in their criticisms of the plan. According to published reports, leaders from 22 states, consumer groups, academics, public utilities and local businesses demanded that the proposal be withdrawn. A main theme of the comments was that the proposed rule–called the Standard Market Design (SMD) proposal–extends FERC’s jurisdiction too far.

The stated goal of FERC’s 600-page proposal is to increase access to the transmission grid and organize the country’s wholesale electricity market in an effort to make it more accessible to wholesalers, which would in turn keep electric rates down for consumers and also ensure a reliable power supply.

The National Rural Electric Cooperative Association (NRECA) said in its 150-page filing with FERC, “NRECA’s standard for analyzing the Commission’s [proposed rulemaking] is whether its provisions will, if implemented, benefit end-users . . ..” 

The filing goes on to say that the main benefits under consideration would be, among other things, lowering consumers’ delivered cost of power and maintaining power system reliability for them. 

“NRECA is compelled to conclude that the SMD, as proposed, will not achieve these results,” the filing said.

NRECA Senior Regulatory Counsel Rich Meyer said, “A major concern with FERC’s ruling is that it will subject approximately 200 distribution cooperatives to new FERC jurisdiction. Expansion of FERC regulatory reach over these cooperatives would unnecessarily raise costs for electric cooperatives and their members,” he said.

FERC orders based on the rulemaking are not expected until late spring of 2003.

(Source: NRECA; Greenwire)

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