FERC Market Rates Claimed Contrary to Federal Law

Only Congress?not the Federal Energy Regulatory Commission?can deregulate rates, according to a brief filed at the U.S. Court of Appeals for the D.C. Circuit in late April by Public Citizen. FERC?s market-rate rules, finalized a year ago, are contrary to the Federal Power Act, the consumer organization claims. For ?the first time,? according to Public Citizen counsel Lynn Hargis, the consumer organization questions whether FERC has the statutory authority to deregulate electric rates by allowing the market to set the prices. The brief was filed in a case stemming from the California energy crisis of 2000-01. During the crisis, wholesale power sellers authorized by FERC to sell electricity at market-based rates allegedly manipulated power markets on a massive scale and overcharged consumers billions of dollars. In November 2001, one year after the crisis began, FERC proposed specific ?market behavior rules? to address abuses it then acknowledged had occurred in California. The rules were finalized in May 2004. These rules were challenged by several suits that were combined before the D.C. appeals court in July 2004. Included at that time were challenges by the California Public Utilities Commission and the California Electricity Oversight Board maintaining that FERC?s behavior rules for electricity sellers are not sufficient to properly monitor electricity sellers. The Public Citizen brief supports this view, Hargis said, adding that the two California parties declined to join in the challenge of FERC?s statutory authority to allow market rates. The public-interest watchdog organization founded by Ralph Nader was joined in the challenge by the Colorado Office of Consumer Counsel, the Rhode Island and New Mexico attorneys general, the Utah Committee of Consumer Services, the Public Utility Law Project of New York, Inc., and the National Consumer Law Center.

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FERC Market Rates Claimed Contrary to Federal Law

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