Citizens Against Kemptown Electric Substation (CAKES) filed their comments on FERC's NOI Promoting Transmission Investment Through Pricing Reform this morning. They did a fantastic job of making insightful suggestions for reform. I think my favorite, in light of recent events, is:
"9. FERC’s Conflict of Interest
It is not possible to serve public ratepayers’ interests when FERC is both promoter and regulator of the utility industry. It has been shown by several Federal agencies that being responsible for both promotion and regulation of an industry leads to ineffective performance of both responsibilities and is a violation of public trust. One historical example for resolving this problem in 1974 was the splitting of the U.S. Atomic Energy Commission (promoter and regulator) into the Nuclear Regulatory Commission (regulator) and the Energy Research and Development Agency (now Dept. of Energy) (promoter). It is time for the U.S. Congress to split FERC into two separate agencies in order that the two responsibilities can be carried out effectively.
One particular example of this FERC conflict of interest is FERC’s gathering of coalbased utilities, PJM, and FERC officials in Charleston West Virginia on 13 May 2005 at
the FERC-sponsored conference "Promoting Regional Transmission Planning and Expansion to Facilitate Fuel Diversity Including Expanded Uses of Coal-fired Resources". The conference record shows a blatant bias toward promoting both generation and transmission by coal-based utilities, which FERC also is supposed to be
regulating. This bias has been perpetuated by FERC since 2005 while loading up coalbased utilities with multiple layers of incentives for building long-distance coal-based energy transmission lines (e.g. PATH Project) cross-country to the East Coast instead of supporting the construction of local renewable wind-based energy generation and distribution lines locally on the East Coast near the load centers. In the interest of credibly serving U.S. Administration energy policy regarding incentives and alternatives, FERC should take the initiative to assess its own dual responsibilities and request the U.S. Congress to split FERC into two independent agencies.
Regulatory reform is needed for FERC. The U.S. Courts already have indicated this need by their recent decisions. The U.S. 9th Circuit Court of Appeals in 2011 curtailed FERC’s free-wheeling promotion of National Interest Electric Transmission Corridors and coal; and the U.S. 4th Circuit Court of Appeals curtailed FERC’s “backstop” siting authority over state public service commissions. Unlike other regulatory agencies, for
example the NRC, FERC has not maintained its independence and does not keep utilities and RTO’s at arm length distance in FERC decision making. This is a
worthwhile topic for further investigation by the General Accounting Office (GAO). Moreover, RTO’s like PJM are not agents of the U.S. Government and, therefore, are
not bound by the ethics laws for protecting the interests of the public and public trust that U.S. Government agencies, such as FERC, are bound to, in particular with regard to agency actions and public perceptions concerning waste, fraud, and abuse. PJM is,
in effect, a trade association of selected share-holder owned electric companies and has a built-in bias toward representing influential electric company members of PJM."
In a time of universal deceit, telling the truth is a revolutionary act. --George Orwell
Read the CAKES comments in their entirety here.
"9. FERC’s Conflict of Interest
It is not possible to serve public ratepayers’ interests when FERC is both promoter and regulator of the utility industry. It has been shown by several Federal agencies that being responsible for both promotion and regulation of an industry leads to ineffective performance of both responsibilities and is a violation of public trust. One historical example for resolving this problem in 1974 was the splitting of the U.S. Atomic Energy Commission (promoter and regulator) into the Nuclear Regulatory Commission (regulator) and the Energy Research and Development Agency (now Dept. of Energy) (promoter). It is time for the U.S. Congress to split FERC into two separate agencies in order that the two responsibilities can be carried out effectively.
One particular example of this FERC conflict of interest is FERC’s gathering of coalbased utilities, PJM, and FERC officials in Charleston West Virginia on 13 May 2005 at
the FERC-sponsored conference "Promoting Regional Transmission Planning and Expansion to Facilitate Fuel Diversity Including Expanded Uses of Coal-fired Resources". The conference record shows a blatant bias toward promoting both generation and transmission by coal-based utilities, which FERC also is supposed to be
regulating. This bias has been perpetuated by FERC since 2005 while loading up coalbased utilities with multiple layers of incentives for building long-distance coal-based energy transmission lines (e.g. PATH Project) cross-country to the East Coast instead of supporting the construction of local renewable wind-based energy generation and distribution lines locally on the East Coast near the load centers. In the interest of credibly serving U.S. Administration energy policy regarding incentives and alternatives, FERC should take the initiative to assess its own dual responsibilities and request the U.S. Congress to split FERC into two independent agencies.
Regulatory reform is needed for FERC. The U.S. Courts already have indicated this need by their recent decisions. The U.S. 9th Circuit Court of Appeals in 2011 curtailed FERC’s free-wheeling promotion of National Interest Electric Transmission Corridors and coal; and the U.S. 4th Circuit Court of Appeals curtailed FERC’s “backstop” siting authority over state public service commissions. Unlike other regulatory agencies, for
example the NRC, FERC has not maintained its independence and does not keep utilities and RTO’s at arm length distance in FERC decision making. This is a
worthwhile topic for further investigation by the General Accounting Office (GAO). Moreover, RTO’s like PJM are not agents of the U.S. Government and, therefore, are
not bound by the ethics laws for protecting the interests of the public and public trust that U.S. Government agencies, such as FERC, are bound to, in particular with regard to agency actions and public perceptions concerning waste, fraud, and abuse. PJM is,
in effect, a trade association of selected share-holder owned electric companies and has a built-in bias toward representing influential electric company members of PJM."
In a time of universal deceit, telling the truth is a revolutionary act. --George Orwell
Read the CAKES comments in their entirety here.
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