APPA's Proposal Deeply Flawed

COMPETE Counsel and former FERC Commissioner William Massey issued the following statement in response to a plan released by APPA on competitive electricity markets:

"APPA's proposal represents a dramatic step in the wrong direction at a critical time for our country.  The U.S. utility industry will have to invest an estimated $1.5 trillion or more in the next 20 years to maintain current levels of reliable electricity service.  In addition we face the likely additional costs of a new carbon reduction regime, all of which will happen in a time of deep economic uncertainty.  In the face of these challenges, APPA's plan to return to cost based regulation would be a disaster.  It would suppress needed investment not only in innovative new technologies such as demand response and in new forms of renewable generation, but also in the maintenance of the existing fleet, potentially threatening reliability.  APPA's flawed proposal to turn back the clock on competition would deeply undermine our nation's ability to meet these energy challenges.

"This perspective was recently confirmed by FERC after a rigorous two year review in which scores of parties, including APPA, provided comment.  In the end, FERC reached the conclusion that the RTO markets are producing benefits for consumers including increasing demand response programs, the development of renewable energy, improved power plant operating efficiencies resulting in cost savings, and enhanced reliability.

"APPA's agenda of a return to cost based regulation comes precisely at a time when we need more competition, not less."