Conn. Delegation Expresses Concern About Wrongdoing to Electricity Ratepayers

WASHINGTON, D.C. — Senators Chris Dodd (D-CT) and Joe Lieberman (ID-CT) and Representatives Rosa DeLauro (CT-3), John Larson (CT-1), Joe Courtney (CT-2), Chris Murphy (CT-5) and Jim Himes (CT-4), today called on the Federal Energy Regulatory Commission (FERC) to investigate the complaints filed against ISO New England, Inc. about a possible wrongdoing to Connecticut's electricity ratepayers.

In a letter to FERC Chairman Jon Wellinghoff, the delegation noted that complaints against ISO New England, Inc. have been filed by state Attorney General Richard Blumenthal, the state Department of Public Utility Control and the state Office of Consumer Counsel, alleging that power plants in New York were paid more than $50 million over two years to supply electricity to households in New England but failed to fulfill their responsibilities as an electricity supplier.

"The complaints raise troubling questions about whether ISO New England's internal market monitoring function failed to adequately protect ratepayers in our state by permitting these payments to continue for two years before notifying the Federal Energy Regulatory Commission (FERC) or seeking rule modifications to prevent continued payments," the delegation wrote. "If the Connecticut agencies' assertions prove true, they cast doubt on the ability of ISO New England to protect the fairness of the electricity markets in our region."

Dodd, Lieberman, DeLauro, Larson, Courtney, Murphy and Himes asked that the FERC investigate the claims and requested that the FERC provide the delegation with a copy of its findings.

A copy of the letter appears below.

July 10, 2009

The Honorable Jon Wellinghoff

Chairman

Federal Energy Regulatory Commission

888 First Street, N.E.

Washington, DC 20426

Re: Connecticut Department of Public Utility Control v. ISO New England Inc., et al., Docket No. EL09-48-000; Blumenthal v. ISO New England Inc., et al., EL09-47-000

Dear Chairman Wellinghoff:

We write to express our strong concern about a possible wrongdoing to Connecticut's electricity ratepayers. Complaints filed by Attorney General Richard Blumenthal, the Connecticut Department of Public Utility Control, and the Connecticut Office of Consumer Counsel, allege that generation resources in New York were paid more than $50 million over two years to supply capacity in New England but shirked their obligations to perform as capacity suppliers. The complaints raise troubling questions about whether ISO New England's internal market monitoring function failed to adequately protect ratepayers in our state by permitting these payments to continue for two years before notifying the Federal Energy Regulatory Commission (FERC) or seeking rule modifications to prevent continued payments. If the Connecticut agencies' assertions prove true, they cast doubt on the ability of ISO New England to protect the fairness of the electricity markets in our region.

When Congress enacted the Energy Policy Act of 2005, it expanded FERC's authority to investigate claims like these and to provide equitable remedies when it finds these claims to be true. In our view, FERC's rigorous exercise of these powers serves two essential and interrelated purposes. First, market participants and administrators must understand that FERC will not tolerate conduct that jeopardizes market integrity. Additionally, it is critically important that FERC reassure customers that they can trust market-based electricity rates to be fair and reasonable and that a fully independent, vigilant market monitor will protect their interests. FERC accomplishes both of these objectives when it provides a thorough, public inquiry into and explanation of the facts.

We share with you the goal of ensuring that wholesale electricity markets operate efficiently and effectively to ensure that our constituents receive reliable service at the lowest reasonable cost. We urge you to investigate the complaints raised by Connecticut regulators and consumer advocates as swiftly and thoroughly as possible, and we respectfully request a report from you on the Commission's conclusions.