New England Senators Introduce RTO Cost Accountability Bill On Monday, February 25, Sens. Bernie Sanders (I-VT) and Olympia Snowe (R-ME), along with Sens. John Kerry (D-MA), Susan Collins (R-ME), Ted Kennedy (D-MA) and Patrick Leahy (D-VT), introduced S. 2660, the "Consumer Protection and Cost Accountability Act." A companion bill in the House is scheduled to be introduced by Rep. Tom Allen (D-ME) this week. NEPPA members have asked their Members of Congress to cosponsor both bills.
The legislation, strongly endorsed by NEPPA, would require the Federal Energy Regulatory Commission (FERC) to ensure that Regional Transmission Organizations/Independent System Operators (RTOs/ISOs) provide electricity at the lowest reasonable cost and that they conduct a cost-benefit analysis when promulgating rules or regulations. NEPPA members, along with other consumer groups, have consistently expressed concerns about increased costs associated with "organized" electricity markets, and have worked with their delegation to advance proposals to improve ISO-NE functions and operations.
In addition to NEPPA, the legislation is supported by the American Public Power Association (APPA), the Electricity Consumers Resource Council (ELCON), the Vermont Public Power Supply Authority (VPPSA), the Ohio Consumers' Counsel, the Burlington Electric Department (BED), Kennebunk Light and Power District, the Maryland Office of People's Counsel, the Massachusetts Municipal Wholesale Electric Company (MMWEC), the Connecticut Municipal Electric Energy Cooperative (CMEEC), the Connecticut Office of Consumer Counsel, the Pascoag Utility District (RI-PUD), the Utility Consumers' Action Network (UCAN), the Maine Public Utilities Commission, and the Maine Public Advocate.
NEPPA Members Meet with Congressional Delegation in Washington, DC
In conjunction with the American Public Power Association's Legislative Rally in Washington, DC, members of NEPPA went to Capitol Hill on February 26 and 27 to meet with the New England Congressional delegation. In their meetings, members discussed the need for more oversight of Regional Transmission Organizations (RTOs) and RTO cost controls, federal energy incentives to help promote renewable development and energy efficiency, and federal climate change legislation and its impact on the region, as well as federal funding for the Low Income Home Energy Assistance Program (LIHEAP).
In particular, NEPPA thanked their legislators for their consistent support to encourage the Federal Energy Regulatory Commission (FERC) and RTOs/ISOs to be more consumer-focused, and also expressed appreciation for their efforts to increase LIHEAP and weatherization funding, as well as their active support on legislation to extend and modify the Clean Renewable Energy Bond program, among other things.
The Congressional delegation, overall, was very responsive to NEPPA, with six U.S. Senators supporting S. 2660, and numerous House and Senate members actively supporting amendments to increase LIHEAP and weatherization funding (e.g. Sens. Reed (D-RI), Snowe (R-ME) & Collins (R-ME)), increase incentives for renewables and energy efficiency (e.g. Sens. Snowe, Kerry (D-MA), Reed (D-RI) and Reps. Neal (D-MA) & Markey (D-MA)) and efforts to advocate for a fair and equitable resolution to address climate change (e.g. Sens. Lieberman (I-CT), Sanders (I-VT) & Whitehouse D-RI)).
House Passes Renewable Energy Tax Bill
On February 27, by a vote of 236-182, the House passed H.R. 5351, the Renewable Energy and Energy Conservation Tax Act of 2008. The bill includes a provision supported by NEPPA and the American Public Power Association, which creates a new category of Clean Renewable Energy Bonds, called "New CREBs." The authorization for New CREBs is $2 billion and is divided between projects of "public power utilities with an obligation to serve" and rural electric coops. It also includes other technical modifications to the program, such as changing the allocation method from "smallest to largest" projects to pro-rata. There is no sunset provision for the new program; however, the current CREB program ends at the end of 2008.
H.R. 5351 is identical to H.R. 2776, which was the energy tax bill passed by the House in August, 2007, inserted into the "energy independence" bill (H.R. 6), and removed at the last minute to ensure Senate passage of the bill. HR 5351 is expected to again face opposition in the Senate, given that Republicans and the White House still adamantly oppose its being "paid for" by eliminating incentives for the oil and gas industry. However, the Senate Democratic leadership remains committed to passing a renewable energy tax incentive package this year and continues to discuss strategies for advancing one.
NEPPA co-signed a letter of support for H.R. 5351, with over 120 other organizations, including environmental groups, manufacturers, and retailers, which was sent to all House members prior to the vote. Speaker Pelosi referenced the letter in her floor statement when discussing the bill and included a copy of it in the Congressional Record.
Carbon Tax "Most Efficient" According to CBO
On February 13, the non-partisan Congressional Budget Office (CBO) released a report saying that the "most efficient" way of dealing with global warming, in terms of limiting economic costs and achieving environmental benefits, is a carbon tax.
The study found that a tax on greenhouse gas (GHG) emissions from coal, oil and other fossil fuels would provide the commercial and industrial sectors with certainty from year-to-year on how much money they would need to spend to deal with climate change. The study, which was done at the request of Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM), also found that a carbon tax could lead to climate benefits several times greater than what would be seen from policies that were not aimed at limiting economic costs. CBO said that businesses would have "an incentive to undertake more emission reductions when the cost of doing so was relatively low and allow them to reduce emissions less when the cost of doing so was particularly high."
However, a carbon tax is politically unpopular in Congress, as lawmakers have, instead focused their efforts on legislation to implement a cap-and-trade system. The CBO study said that the next-best approach to a carbon-tax would be to implement S. 1766, the Bingaman-Specter (R-PA) cap-and-trade bill. CBO said that the inclusion of a "safety-valve," which would limit the costs associated with industry compliance, offered companies some flexibility in addressing the issue.
The CBO study also analyzed S. 2191, the Lieberman-Warner bill, which uses a "circuit breaker" approach, where the government could step in and stop the need to reduce emissions if the cost of CO2 credits went beyond a certain price level. According to the CBO, "such interventions could aggravate price fluctuations if those judgments were incorrect."
Sens. Reed, Snowe and 24 Senate Colleagues Send Letter Supporting Energy Efficiency and Renewable Energy Incentives in FY 09 Budget
On February 13, Sens. Jack Reed (D-RI) and Olympia Snowe (R-ME), along with twenty-four of their Senate Colleagues sent a letter to Budget Committee Chairman Kent Conrad (D-ND) and Ranking Member Judd Gregg (R-NH) encouraging that they include significant funding for energy efficient programs and clean energy tax incentives in the FY09 Senate budget resolution.
The letter states that, "The Energy Policy Act of 2005 (EPAct 2005) and the Energy Independence and Security Act of 2007 authorize billions of dollars for the Energy Efficiency and Renewable Energy (EERE) account at the Department of Energy. We recognize the difficult fiscal constraint facing the budget committee as it crafts the 2009 resolution. Therefore, we request that the Committee increase funding for these programs as close as possible to the $3.8 billion authorized level in EPAct 05. This level of investment will allow these programs to make a real impact on reducing our nations' energy demand."
In addition, the Senators said, EPAct 2005 created energy efficiency and renewable energy tax incentives that are critical to investments in clean energy technologies. Some of these incentives expired in 2007, and many more will expire at the end of 2008. They also urged the Budget Committee to allow room in the FY 2009 budget resolution for multi-year extensions and enhancements to those important tax incentives.
In addition to Sens. Reed and Snowe, the following Senators signed the letter: Jeff Bingaman (D-NM), Susan Collins(R-ME), Robert Menendez (D-NJ), Bernie Sanders (I-VT), Maria Cantwell (D-WA), Lisa Murkowski (R-AK), Arlen Specter (R-PA), Daniel Akaka (D-HA), Ted Kennedy (D-MA), Richard Lugar (D-IN), John Kerry (D-MA), Norm Coleman (D-MN), Chris Dodd (D-CT), Hillary Clinton (D-NY), Amy Klobuchar (D-MN), Joe Lieberman (I-CT), Patrick Leahy (D-VT), Herb Kohl (D-WI), Carl Levin (D-MI), Gordon Smith (R-OR), Russ Feingold (D-WI), Debbie Stabenow (D-MI), Tom Harkin (D-IA) and Evan Bayh (D-IN).