Consumer advocates fault power plan

BANGOR – The Federal Energy Regulatory Commission is being accused of overstepping its authority by ordering the formation of a 12-state power market system, but the consumer advocates pointing the finger at the national board may not have any say in stopping it.

In papers filed this week, the advocates are urging FERC to reconsider its July 12 order instructing three regional power systems, including New England’s, to form one electricity market that would stretch from Maine to Virginia.

FERC maintains the larger grid would create a more competitive and reliable energy market.

But meeting this week in Washington, D.C., are most of the participants who help determine the energy market policies in each system, and they’ve come with ideas about what needs to be done to form the larger power market.

The advocates would prefer that FERC rescind its order, or at least slow down the time frame in which it is to be implemented. They contend the decision cannot be moved forward without the request of state regulators, and none have given their OK.

But mostly, the advocates are telling FERC that if the 12-state power system is set up, they want a vote in any matters presented to the market’s governing board.

Anne Ross, the consumer advocate for New Hampshire, said Tuesday she’s concerned that what FERC is asking to be accomplished in a mandated 45 days simply isn’t manageable. The three power systems currently are following previous initiatives from FERC that called for them to develop reasonable, workable power market conditions within their regions. FERC has given them time to work out all the kinks, and now it expects the same to be done on a larger scale.

“The focus at FERC is pretty much, ‘We’ll tell you how to do it,'” Ross said.

If a 12-state grid were formed, Maine, New Hampshire and other states would lose local control in energy policy decisions and how they operate the power markets within their own borders, Ross said. The smaller states’ voices may be silenced by bigger states, such as New York and Pennsylvania, which have more power users.

Of greatest concern is that power generators will have more of a say in influencing FERC and market pricing conditions, especially if consumers’ concerns aren’t taken seriously at regulatory meetings. Ross said FERC, in other recent decisions, has shown favoritism to the generators.

“[President] Bush has certainly sent a lot of signals that he supports the generators,” Ross said. “He’s from Texas and that’s where most of them are from. Clearly there’s some serious problems with that.”

Craig Hazin, a spokesman for ISO New England, the governing board of New England’s power grid, said the power generators are putting a lot of pressure on FERC during the meetings this week. ISO is a participant in the meetings.

“They [power generators] wanted it yesterday because they want to do the big deals,” Hazin said.

Power generators have been accused of holding back power to control market conditions, which is called gaming. Assurances that gaming won’t happen under the new system give the issue of public confidence greater importance in the meetings this week, Hazin said.

“Public confidence … is a key concern, that there isn’t all this gaming going on all over the place,” Hazin said.

Anthony Buxton, an attorney for the Industrial Energy Consumers Group in Maine, said consumer representation on the board governing the new grid could help to keep an eye on the suppliers.

But, he said, FERC should have given consideration to how difficult it could be to merge three power systems into one before it ordered the formation of the super-power market.

“There should have been studies of its feasibility before it was ordered,” Buxton said. “There’s a substantial threat to the reliability and the financial stability of the grid in New England.”

Maine Public Advocate Stephen Ward said FERC’s order will lead to a protracted court fight that will divert attention from areas such as power grid congestion that need to be addressed immediately.

“It’s like FERC has a bright idea and there’s only room for one idea,” Ward said.

Ward predicted the decision would result in a “three-year effort with lots of appeals, and no progress on other fronts, like dealing with market power and congestion-management.”

The groups fighting FERC include the Maine, New Hampshire and Connecticut public advocates, IECG, the Massachusetts Attorney General, the Energy Council of Rhode Island, the Energy Consortium, and the Mead Corp.

– The Associated Press contributed to this report.