April 29, 2003
Tennessee’s Consumers Won’t Benefit from Electricity Measure in Energy Bill
Statement of Joan Claybrook, President, Public Citizen
On Wednesday, April 30, at a meeting of the Senate Energy and Natural Resources Committee, Sen. Lamar Alexander (R-Tenn.) will be voting on an electricity title in an all-inclusive energy bill. Sen. Alexander has two choices when casting his vote. If he votes against the title, he will be supporting the current, state-regulated, electricity system that has provided inexpensive, reliable electricity for consumers throughout Tennessee. If he votes for the electricity title, Sen. Alexander will be supporting a scheme to allow the federal government to seize control of electricity transmission from state regulators and export the electricity currently supplied to Tennessee by the Tennessee Valley Authority (TVA).
On April 18, committee Chairman Pete Domenici (R-N.M.) released a revised draft of the electricity title that will limit the ability of states to protect consumers by controlling locally generated electricity. Tennessee should be most concerned over language in Domenici’s measure that encourages the creation of Regional Transmission Organizations (RTO) and grants the Federal Energy Regulatory Commission (FERC) authority over most power line assets – a job now left to states. This would authorize TVA to turn all of its transmission facilities over to such an RTO if the Department of Energy so chooses.
While proponents claim that multi-state markets created by RTOs will increase competition, regional markets currently operating in Texas, the Midwest and the Northeast have been unable to address the market abuses that occurred in California and that may arise in the regional transmission organization system envisioned in this legislation. Domenici’s bill would lead to dramatically higher prices for consumers as inexpensive, reliable power is exported from TVA to other regions. At the same time, Tennessee officials, who are accountable to the voters, would lose their ability to protect consumers as their authority is handed over to the same five-member commission in Washington, D.C., that approved of and oversaw the price-gouging during the California energy crisis. President Bush appoints the FERC commissioners.
Public Citizen urges Sen. Alexander to reject this provision of the energy bill.