Consumer group says FERC ignored competitive bidding in recent electric grid order


Right of First Refusal? Remember how it again died in the recently concluded Oklahoma legislative session?

The ROFR issue remains with us on a national basis and the Electricity Transmission Competiton Coalition is challenging a recent decision by the Federal Energy Regulatory Ccommission to restrict competition on certain transmission projects.

The Coalition has filed for a rehearing with FERC on Order 1920 because of its ROFR inclusion on a new federal monopoly provision.The so-called ‘Right-Sizing’ Right of First Refusal provision would grant a federal monopoly for the replacement of aging electricity transmission infrastructure in the United States, which would lead to significant electricity costs increases for consumers.

“The Federal Power Act is a consumer protection statute, and the United States Supreme Court has been clear that FERC can only act within its powers provided by Congress,” asserted Paul Cicio, Chair of the Electricity Transmission Competition Coalition.

“Order 1920 ignores both. The Federal Power Act does not give FERC the power to create new federal monopolies.”

He maintained that Order 1920 is inconsistent with the Biden administration’s call to pursue competition through the President’s Exeutive Order and a joint filing of the U.S. Department of Justice and Federal Trade Commission on the rule.

“The inclusion of a new federal monopoly by FERC in Order 1920 is a blow to consumers, who expect their consumer protection agencies to protect them from monopolistic abuses. FERC should stand-up for consumers by removing this ROFR and wholeheartedly endorse competition, the only way to lower electricity rates,” said Cicio.

“Today’s rehearing request provides an opportunity for FERC to correct its mistake.”

His announcement said the average U.S. electric bill is projected to be its highest in 10 years this summer. Residential electricity prices have risen by 20% over the last three years according to the Energy Information Administration and transmission costs represent the largest component of those rising prices.

The latest inflation data, according to Cicio, showed that electricity price increases are almost double the CPI over the last year. Competition has been shown to lower costs by 40%. The U.S. will need to spend over $2 trillion on transmission by 2050; electricity transmission competition will save ratepayers hundreds of billions of dollars.

You can read ETCC’s filing in full here.

You can read ETCC’s factsheet on the four legal issues and errors in Order No. 1920 here.