energy plan has ag worried
Capital Press Staff Writer
August 8, 2002
PORTLAND - Hold on. Not so fast. Don’t
rush into something that could trigger a
repeat of the 2000-2001 energy crisis.
That’s the plea a coalition of power
utilities and other organizations is sending
out about the Federal Energy Regulatory
Commission’s proposal to make sweeping
changes to the way electricity markets
For agriculture, FERC’s proposal to
impose a one-size-fits-all rule for
electricity transmission on the nation sends
up warning flags of possible rate hikes and
a repeat of the market manipulation brought
about by California’s failed experiment
with deregulation, say several energy
Under its proposal released on July 31,
FERC is calling for a “standard market
design” that would create deregulated
markets for transmission rights.
As part of that, the agency also wants an
independent organization to take over
control of a state’s electrical
transmission grid connecting energy
suppliers to local utilities. The agency
says that would ensure the electricity needs
of consumers throughout a region are met.
But many energy experts warn that these
changes would make the Northwest and
California even more vulnerable to the
market abuses that have already cost
ratepayers up and down the West Coast
billions of dollars.
“A recipe for disaster,” is the way
the newly formed Northwest Power Works
describes FERC’s proposals.
Last month, the campaign, which includes
more than 50 utilities in the Northwest,
sent a letter to the region’s
congressional delegation, urging the members
to ask FERC to delay electricity
restructuring at least until the multiple
investigations of power-market manipulation
have been completed.
“Until these investigations are
completed and we thoroughly understand how
the companies manipulated electricity
markets and how such machinations can be
prevented, it would be irresponsible and
dangerous to proceed with the proposed
restructuring of the Northwest electricity
system,” says the letter, which was signed
by more than two dozen leaders of public
FERC, meanwhile, says its proposal has
built-in safeguards designed to make sure
those problems aren’t repeated.
Speaking specifically about agriculture,
Stu Trefry, government relations specialist
for Washington state’s Public Utility
Districts Association, warns that FERC’s
proposed changes would lead to higher power
rates and instability.
“Agriculture thrives on stability,”
he said. “FERC’s market-based system is
not built for that. We want utilities to be
able to set their own rates instead of being
subject to the wild swings of a market-based
Trefry warns that the comparatively low
power rates that irrigators and food
processors in the Northwest pay would
definitely be in jeopardy.
“It’s a disaster based on
unpredictability,” he said.
Dennis Conley, owner of Basic American
Foods, a potato processing plant in Moses
Lake, Wash., is equally concerned about the
possibility of rates going up under FERC’s
“Any of us in food processing and
agriculture would be against anything that
does that,” he said. “Our businesses are
very fragile. We’re already operating
under conditions that put us at a
competitive economic disadvantage.”
Pointing out that agriculture in the
Northwest is hindered by being a long way
from domestic markets in the Midwest and on
the East Coast, Conley said that the
low-cost, stable energy that the region has
enjoyed historically is an advantage that
helps offset that geographical disadvantage.
“It’s a fragile balance,” he said.
“It doesn’t take much to tip the
Conley is satisfied with the region’s
current contract-based system that’s
geared to the public good.
“It seems to work,” he said. “I’m
a big supporter of local control. I
haven’t seen many federal oversight
programs that lead to efficiency.”
During a press conference last week, 18
regulators from utility commissions in 15
states issued a statement expressing grave
concerns about FERC’s proposed rules
seeking to standardize electricity markets.
“In our opinion, FERC’s proposal is
nothing more than a power grab by a small
federal agency that cannot be as effective
as the 50 states in ensuring reliability and
protecting consumers,” said Loretta Lynch,
California Public Utilities Commission
“FERC is subjecting our consumers and
economy to a reckless experiment,” said
Marilyn Showalter, chair of the Washington
Utilities and Transportation Commission.
Showalter also pointed out that while
FERC’s proposal might work in other parts
of the country, it wouldn’t work in the
Northwest, where much of the power is
supplied by a river system, that is also
managed for other uses such as fish
protection and recreation.
FERC will accept comments no later than
75 days after it issued its notice of
proposed rulemaking on July 31, 2002. By
Sept. 30, 2004, public utilities that own,
operate or control interstate transmission
facilities are to be operating under
FERC’s standard market design.
FERC’s proposed rules can be viewed at
the agency’s website: www.ferc.gov. Once
on the agency’s home page, look on the
side of the page for “featured topics”
and click on “standard market design.”
The site includes a 19-page news release
about the proposal, the 600-page proposal, a
fact sheet, questions and answers, and other
information about the proposal.
Comments about the proposal can either be
sent electronically through FERC’s website
or by mail to: FERC, Office of the
Secretary, 888 First St. NE, Washington,