FERC penalty discussion off agenda

WASHINGTON – Federal energy regulators were prepared to reopen discussion Wednesday about whether to impose a penalty against electricity suppliers in New England states. But the item was taken off the agenda a day before the meeting.

The Federal Energy Regulatory Commission, which approves rates for wholesale electricity, was scheduled to review an earlier decision to raise the charges imposed on electricity suppliers when they fail to buy enough power to exceed the installed capacity, or the maximum power need of customers in the New England power grid.

Previous failures by suppliers to meet the demands of the New England grid have been due to unusually high costs for electricity – not a lack of available power.

FERC ruled that the ICAP penalty should be raised from 17 cents per kilowatt month to $8.75 per kilowatt month.

FERC also made the penalty retroactive to August 2000, which makes potential electricity rate hikes for Maine consumers as much $100 million.

FERC officials would not reveal why the item was taken off Wednesday’s agenda. The issue could be discussed at the commission’s next meeting on March 14. A FERC official added, however, that the commissioners have the power to sign off on an order without holding a public meeting.

The postponement of the discussion was welcome news to Sen. Olympia J. Snowe, R-Maine, who has been an opponent of the penalty hike.

“We hope they want a deliberate review of the ruling,” said Dave Lackey, Snowe’s spokesman. “We’ve been very concerned that if the FERC action were to remain in place, it would apply a one-size-fits-all approach to a situation much more complex.”

The commission has been accused of raising the penalty, which was announced in December, without proper examination of the power situation in the New England region. The action FERC took was more reflective of energy markets in other parts of the United States with poor energy supplies, according to Lackey.

“The initial decision to increase penalty charges was made somewhat in haste and without full review,” said Felicia Knight, a spokesperson for Sen. Susan M. Collins, R-Maine. “It’s prudent that all concerned parties have time to make their case.”