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U.S. House Subcommittee Reviews Kennedy’s Fair RATES Act

February 10, 2016 By Cheryl Kaften

A measure (H. R. 2984) filed by U.S. Representative Joseph Kennedy III (D- Mass.-4) last July – intended to ensure that ratepayers have the right to appeal electricity rates reviewed by the Federal Energy Regulatory Commission (FERC) – was debated by the Energy and Power Subcommittee on February 2. That subcommittee must pass on the bill before the full Committee on Energy and Commerce will decide its fate.

The Fair Ratepayer Accountability, Transparency, and Efficiency Standards Act, referred to as the Fair RATES Act ,would amend Subsection (d) of section 205 of the Federal Power Act to provide that “any inaction by the Federal Energy Regulatory Commission that allows a rate change to go into effect shall be treated as an order by the commission for purposes of rehearing and court review.”

Concurrently, Senator Edward Markey (D-Mass.) introduced a version of the bill – the Fair Ratepayer, Accountability, Transparency and Efficiency Standards (RATES) Act – in the Environment and Public Works Committee.

Markey explained that the rationale for the bill is to give “the general public … an avenue to protest a rate change filed with FERC through the Federal Power Act (FPA), which allows new rate changes to take effect if FERC approves them, or fails to issue an order either approving or denying filed rates. However, if a vacancy on the commission leads it to be deadlocked, rate decisions become effective by operation of law, even though they are not approved by a majority of commissioners – thereby depriving the public of its ability to challenge decisions because FERC did not issue an official order.

“The Fair RATES Act,” Markey said, “would fix such a situation, which we saw in New England in 2014 [following the annual Forward Capacity Auction 8 for wholesale electricity rates], by stating that a rate change that becomes effective by operation of law is the equivalent of FERC issuing an order.”

Consumers should never be held voiceless in the process that determines their energy rates,” commented Kennedy. “By introducing a Senate companion of the Fair RATES Act, Senator Markey is adding his unparalleled record of advocacy for our ratepayers to this legislation. With increasing bipartisan support in the House and Senator Markey’s version of the bill in the Senate, we can ensure consumers always have an avenue to appeal when federal regulators determine whether their rates are truly just and reasonable.”

“The public deserves to have an appropriate role in reviewing any proposed rate changes submitted to the Federal Energy Regulatory Commission and the ability to protest rates if warranted,” said Senator Markey. “However, in cases where FERC is deadlocked, the public loses their ability to challenge decisions. In baseball, a tie goes to the runner, but when it comes to energy rates at FERC, a tie goes against the public. This legislation would remedy this situation to protect ratepayers. I thank Congressman Kennedy for continuing to work with me on these important issues to protect ratepayers in Massachusetts and across New England.”

The two legislators also wrote a letter to U.S. President Barack Obama, asking him to fill all vacancies on the Federal Energy Regulatory Commission, in order to prevent voting deadlocks. “The five-member independent agency is already without one commissioner,” they said in their February 2 correspondence to the POTUS, adding that “a second [commissioner] recently [announced] his intent to step down next June.”

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