Senators Lieberman And Blumenthal Urge Federal Energy Regulatory Commission To Improve Oversight Of All Regional Transmission Operators Including ISO-New England

(Washington, D.C.)-- Senators Joseph I. Lieberman and Richard Blumenthal today issued a joint letter to Federal Energy Regulatory Commission Chairman Jon Wellinghoff requesting that FERC implement measures to improve the Commission’s oversight of regional transmission operators (RTOs), including strengthening opportunities for consumer input and involvement in the annual budget process and performance assessment.   Each region of the country has a regional transmission operator.  All of the New England states are under the jurisdiction of ISO-New England.

“Without effective FERC oversight and consumer input, ISO-NE – and other regional transmission operators – will continue to impose runaway budgets on electricity consumers.  Connecticut ratepayers demand and deserve lower electricity rates which include only the minimum amount necessary to fund safe and secure transmission lines,” Blumenthal stated.

The letter follows a recent filing by the Connecticut Attorney General, Connecticut Public Utilities Regulatory Authority, and the Office of Consumer Counsel regarding the proposed New England ISO’s budget. ISO-NE’s budget has increased by 34 percent from 2009 to 2013, including a 14.8 percent increase projected for 2013 alone. In the past five years, ISO-NE has increased its employment by 100 positions, at the same time other public entities are reducing staff and cutting expenses. Despite ISO-NE’s dramatic and steady increase in ratepayer charges since 2009, FERC has yet to hold a single public meeting in that time.   These state agencies complained to the FERC about the lack of consumer input into the ISO-NE budget.

The creation of regional transmission operators offered the opportunity for transmission line operators, generators, utilities and others to work cooperatively to develop highly efficient, reliable and cost-effective electricity. Under federal electricity restructuring legislation, RTOs were provided with the authority to develop their budgets and implement electricity distribution and generation policies subject to FERC’s oversight.  Because RTOs are predominantly operated by transmission line operators and electricity generators, the consumer must rely on effective intervention by state public agencies charged with representing the consumer’s interests and FERC’s careful scrutiny of RTOs.  Unfortunately, the experience since establishment of the seven RTOs in the United States has been one of relatively lax oversight, budgets that have grown out of proportion to the economy and policies that have been subject to intense consumer criticism.
The joint letter urges FERC to strengthen consumer agency input and involvement around the RTO budget process by (a) requiring all RTOs to submit their capital budget and administrative budget for stakeholder review at the same time; (b) requiring RTOs to submit their budget to state consumer agencies at least 60 days prior to the submission of such budgets to FERC, allowing for inclusion of comments by such agencies in an RTOs subsequent submission to FERC; and (c) holding a hearing upon the request of  any state consumer agency. Further, the letter urges FERC to strengthen its oversight of RTOs by: (a) establishing performance measures such as reliability, efficiency and cost; and (b) conducting periodic financial audits of RTOs.

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