Bipartisan lawmaker group faults Chu on power marketing plan

Source: Hannah Northey, E&E reporter • Posted: Tuesday, June 12, 2012

A bipartisan group of 166 lawmakers are accusing Energy Secretary Steven Chu of attempting to change the role of the nation’s power marketing administrations without congressional approval.

Forty senators — including Democrats Jeff Merkley of Oregon, Tom Udall of New Mexico and Maria Cantwell of Washington — and 126 House members questioned Chu’s actions in a letter last week.

At issue is a March memo from Chu ordering the power marketing administrations (PMAs) to leverage partnerships, rate-making power and financing to upgrade transmission and bolster renewable power generation (E&ENews PM, March 16).

Utilities, rural electric cooperatives and local officials are concerned the plan could spark power price spikes and alter the historical role of the power marketing administrations, the lawmakers said. Chu’s plan could also expand the PMAs’ authority, they said.

“These proposals also constitute a fundamental shift away from regional planning, and the understanding of local needs and impacts which comes with it, towards a Washington, D.C.-based top-down approach,” the lawmakers wrote. “We are also concerned that the Department of Energy appears to be sidestepping the role of Congress in debating and overseeing policies relating to the PMAs.”

The PMAs — the Bonneville, Western Area, Southeastern and Southwestern power administrations — are independent companies within DOE that market wholesale electricity, mainly from federal hydropower projects. The federal entities oversee more than 33,000 miles of transmission, according to the DOE.

But Chu wrote in a May 30 blog post that he will proceed only after hearing from members of Congress, stakeholders and utility customers as well as the four power marketing administrations. The department is expected to hold a series of workshops beginning next month to gather public comments in Arizona, Colorado, California, South Dakota and Montana.

Chu wrote that the directive won’t alter the PMAs’ historical role of providing electricity at cost-based rates, and that the PMAs need to invest in “cost-saving smart grid and transmission technologies” to avoid blackouts and brownouts. The directive, he added, also aligns with the DOE’s statutory requirements because the technology will protect the grid, and increase the grid’s efficiency and pay for itself.

The American Public Power Association and the National Rural Electric Cooperative Association applauded the lawmakers’ letter.

“The congressional support for this letter to Secretary Chu speaks volumes about the level of concern from Americans nationwide over Secretary Chu’s proposals and their potential to cause substantial increases in their utility bills,” Mark Crisson, the American Public Power Association’s president and CEO, said in a statement. “Secretary Chu’s goals would be achieved at the expense of PMA customers.”