Public Power - June 2008 - (Page 12)

10 QUESTIONS confident that the commission will continue to take a hard look at these markets and make improvements where necessary. The Senate Energy Committee also will begin its oversight on the state of competitive markets, with a series of hearings beginning this summer. The committee will examine whether the organized wholesale power markets have enhanced reliability, improved efficiencies, and resulted in just and reasonable electricity costs. A lack of available high-voltage transmission capacity is another obstacle to competitive electricity markets. What steps should Congress take to help alleviate this problem? We all know that this country faces a tremendous need for more transmission capacity. We simply can’t ensure the grid’s reliability without constructing new transmission. In back-to-back comprehensive energy bills—the Energy Policy Act of 2005 (EPAct) and the Energy Independence and Security Act of 2007 (EISA)—Congress acted to enhance our electrical grid. Pursuant to EPAct, the Energy Department studied the nation’s transmission and designated two severely congested areas as National Interest Electric Transmission Corridors. We also tackled one of the biggest problems to siting transmission lines— NIMBYism—by providing FERC with backstop siting authority in National Corridor areas. In 2005, Congress also looked at siting energy infrastructure on federal lands. EPAct directed DOE and the land management agencies to designate energy rights-of-way corridors on federal lands for electricity transmission lines, as well as oil, gas, and hydrogen pipelines. Final western land designations are expected by this August. These two EPAct provisions, when fully implemented, will go a long way in helping us increase our transmission capacity. In last year’s energy bill, Congress included a Smart Grid Title in an effort to modernize our infrastructure and improve the reliability, security and efficiency of the electric grid. The Federal Energy Regulatory Commission has attempted to address transmission constraints by offering higher rates of return on investment to companies seeking to build new transmission. Some policymakers believe jointly owned and developed transmission might be a better approach. Do you support one or the other of these approaches? I don’t believe this needs to be an “either/or” proposition. For me, the bottom line is that our nation’s infrastructure must be expanded. In the 2005 Energy Policy Act, Congress directed FERC to develop incentivebased rate treatments in an effort to spur transmission development. But I also recognize that public power companies have successfully participated in jointly owned transmission arrangements, particularly in the West. Both approaches should be encouraged. I also support the commission’s commitment to regional transmission planning in the organized wholesale markets. 3 Sen. Lisa Murkowski Senator Murkowski, a Republican from Alaska, is a member of the Energy and Natural Resources Committee. She responded to Public Power’s questions on May 14, 2008. Consumer-owned utilities in states served by regional transmission organizations are paying higher costs of electricity than those in states without organized markets. Electricity customers are paying higher costs to support new administrative organizations and are taking a hit when financial speculators “play” in the power markets. What steps should Congress take to reform these costly organized electricity markets? I understand the APPA and its members are frustrated with how the organized wholesale markets are administered by regional transmission organizations (RTOs) and independent system operators. The Federal Energy Regulatory Commission was right to begin examining the challenges facing the RTO-run markets last year and its resulting rulemaking has focused on areas where immediate steps can be taken to strengthen competition—demand response, long-term contracts, market monitoring, and responsiveness to customers and stakeholders. Still, I know that APPA has been disappointed that FERC has not expanded its inquiry to examine whether the rates in the organized markets are just and reasonable—particularly when speculators have defaulted on hedge bets to the harm of consumers, like we saw last December in the PJM case. As FERC has made clear through its current notice of proposed rulemaking, the rule is not the last word on competition policy. I am 12 JUNE 2008 1 2 4 Climate change is one of the most challenging issues facing our nation’s energy providers. Greater reliance on renewable resources is one avenue to meeting this challenge. Some members of the Senate Energy and Natural Resources Committee, including Chairman Jeff Bingaman, wanted to adopt a national renewable portfolio standard. Do you support this approach and why or why not? While I support encouraging utilities to add as much renewable and clean energy to their systems as they economically can, I have not been able to support the proposals for a national renewable portfolio standard that have been floated, so far. There are such regional differences in the ability of utilities to install renewables that imposing a nationwide “one-size-fits-all” solution would cause some ratepayers to subsidize the installation of renewable power elsewhere. PUBLIC POWER

Table of Contents Feed for the Digital Edition of Public Power - June 2008

Public Power - June 2008 Contents Perspective 10 Questions Finding Common Ground on Climate Change Solutions A Patchwork Approach to Renewable Energy Whose Grid Is It Anyway? The Little Utility That Could Benchmarking Customer Service Can Prairie Hay Power Your Town? Storming the Control Room Investing in the Smart Grid Coming of Age: Superconducting Cables Community Broadband Economic Development Customer Service Human Resources For Governing Boards Safety Parting Shot

Public Power - June 2008

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