Groups urge ‘long overdue’ study of US electricity costs, wholesale markets
The letter asked lawmakers to order the U.S. Government Accountability Office or another independent oversight organization to conduct a “detailed and objective study” of U.S. electricity costs, saying such a study is “long overdue.”
More than two decades after the Federal Energy Regulatory Commission took steps to open competitive markets at the wholesale level, about two-thirds of the U.S. is served by such markets, the letter noted. Those market restructurings, along with efforts by states to expand competition at the retail level, were a “bold and unprecedented experiment in electricity regulation,” the groups said. But the “impacts on customer bills appear to have been mixed.”
Some of the organizations behind the July 8 letter had asked FERC for a meeting on this issue, but commission staff said the agency was “not inclined at this time to commission that type of broader study.”
The groups, therefore, urged lawmakers to require a study to “investigate the cost impacts of federal policy regarding market structure, namely the net benefits to retail consumers resulting from the formation of regional transmission organizations … and independent system operators.”
At a minimum, the study should examine the retail cost impacts of existing RTO market structures, the letter said, and explore the reliability impacts of wholesale market design. If resources allow, the analysis should also include a “set of best practices regarding RTO expansion,” the groups added.
“Regulators at FERC and the states cannot fulfill their statutory duties without understanding the fundamental relationship between market structure and the cost and reliability of electricity,” the letter concluded. “This is not a partisan issue — it is a matter of good governance, regulatory oversight, and, ultimately, the economic health of the nation.”
The letter was signed by the Electricity Consumers Resource Council, Energy Choice Coalition, Public Citizen, Association of Businesses Advocating for Tariff Equity, Carolina Utility Customers Association, Conservative Coalition for Climate Solutions, Conservative Energy Network, Heritage Action for America, Industrial Energy Consumers of Pennsylvania, Louisiana Energy Users Group and the R Street Institute.