Campaign for Fair Electric Rates, Coalition of Business, Consumer and Utility Groups Launch Major Initiative to Reform Electricity Markets

Business Wire, June 12, 2008

WASHINGTON -- A diverse coalition of industrial electricity users, public-interest organizations, consumer groups and publicly-owned electric utilities, representing the interests of millions of consumers, today launched the Campaign for Fair Electric Rates. The campaign is a grassroots effort to reform the wholesale electricity markets created and operated by regional transmission organizations (RTOs).

The campaign will educate consumers, businesses and the media on the failures of restructured electricity markets; and organize the public to contact their senators and representatives. The campaign is urging Congress to request that the Federal Energy Regulatory Commission (FERC) investigate the wholesale electricity markets and take action to protect consumers.

Participants in the campaign are united in their view that the restructuring of the wholesale electricity markets has not produced promised benefits and instead has harmed consumers and the economy. Fundamental changes made to the wholesale electricity markets have not produced competition; instead they have created exorbitant profits for many companies that generate electricity, excessively high electricity rates for consumers and insufficient investment in new power plants and transmission lines.

Despite these problems, the FERC, the federal agency with the responsibility to protect consumers, continues to ignore repeated calls from consumers and businesses to investigate these markets.

Market rules allow generators to charge high rates for electricity regardless of the actual costs, even when consumers have already largely paid for the generating plants. Many states also deregulated the retail market structure, exposing consumers to the higher prices of these RTO-run markets. In these deregulated states, more than 45 million customers are paying 56 percent more than the rest of the country for electricity.

"It's time to restore fairness to the electricity markets and protect consumers," says Mark Crisson, CEO of the American Public Power Association, which represents more than 2,000 non-profit public utilities owned by their customers. "We're asking Congress and the FERC to address this growing crisis."

"We have now passed a decade in which the FERC has been trying and failing to make the electricity market work in the theoretical image of competition," said Mark Cooper, director of research for the Consumer Federation of America. "We are asking it to put the horse back in front of the cart, to put consumer protection where it belongs, at the center of its mission."

According to John Anderson, president of the Electricity Consumers Resource Council (ELCON), "Today's organized markets are not competitive, are anti-consumer, and are likely to remain that way without significant action by FERC or Congress."

For more information on the campaign, including a list of coalition members, fact sheets and other resources, visit http://www.fairelectricrates.net or contact Sarah Tanksley at stanksley@appanet.org or 202-467-2934.