[Congressional Record Volume 154, Number 30 (Monday, February 25, 2008)]
[Senate]
[Pages S1125-S1126]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SANDERS (for himself, Ms. Snowe, Mr. Kerry, Ms. Collins, 
        Mr. Kennedy, and Mr. Leahy):
  S. 2660. A bill to amend the Federal Power Act to ensure that the 
mission and functions of Regional Transmission Organizations and 
Independent System Operators include keeping energy costs as low as 
reasonably possible for consumers, and for other purposes; to the 
Committee on Energy and Natural Resources.
  Mr. SANDERS. Mr. President, today I am introducing legislation to 
help protect consumers from high electricity prices that have followed 
deregulation of electricity markets. I am honored to have many of my 
colleagues joining me in offering this legislation--Senator Snowe, 
Senator Kerry, Senator Collins, Senator Kennedy, and Senator Leahy.
  Market pricing of electricity promised to bring lower costs to 
consumers. Unfortunately, consumers in organized market regions--those 
that have a Regional Transmission Organization or

[[Page S1126]]

Independent System Operator, RTOs or ISOs as they are called--are 
experiencing just the opposite: substantial, across-the-board problems 
with spiraling costs, unaccountable governance, and a chronic lack of 
oversight. Increasingly, RTOs/ISOs are adopting questionable, unproven, 
and expensive market mechanisms, and there seems to be little interest 
at the Federal Energy Regulatory Commission, FERC, or the RTOs/ISOs to 
question any of the economic theories behind these mechanisms. I note 
that on February 21, 2008, FERC finally took a step toward 
acknowledging that the markets are not working by issuing a proposed 
rule that would address some concerns. I believe, however, that the 
legislation I am introducing today will focus FERC on consumer issues, 
which were not adequately addressed in the proposed rule.
  The goal of lowering costs to consumers has been lost in the race to 
create competitive electricity markets. In fact, something as simple as 
keeping costs to consumers as low as reasonably possible is not even 
part of the mandate, or mission statement, of any of the Nation's ISOs 
or RTOs! In New England, we have seen what can happen--there have been 
several instances in which ISO-New England has implemented expensive 
market mechanisms, over the objection of significant segments of 
electric stakeholders, without either conducting a cost-benefit 
analysis or comparing the costs of the proposed initiative with 
alternative means of achieving the desired results.
  Showing the strong interest in this issue in the New England region, 
the legislation is supported by the Northeast Public Power Association, 
the Vermont Public Power Supply Authority, the Burlington Electric 
Department, Kennebunk Light & Power District, the Massachusetts 
Municipal Wholesale Electric Company, Connecticut Municipal Electric 
Energy Cooperative, the Connecticut Office of Consumer Counsel, and the 
Pascoag Utility District. The Ohio Consumers' Counsel, the Maryland 
Office of People's Counsel, Electricity Consumers Resource Council, and 
the Utility Consumers' Action Network support the legislation as well.
  The legislation I am introducing today would refocus FERC on the 
consumer cost impacts of RTO/ISO actions. Consistent with existing law, 
the bill makes explicit that, when FERC considers the lawfulness of 
RTO/ISO rates, it must assess whether those rates will ensure that 
consumer costs are as low as reasonably possible consistent with the 
provision of reliable service. Also, in recognition of the uniquely 
important roles played by RTOs and ISOs, this bill requires FERC to 
make both goals--cost minimization and reliability--a part of each RTO 
or ISO's mission. These changes clarify and amplify existing law as 
applied to these important organizations, but do not alter, diminish, 
or imply an absence of similar requirements with respect to other 
public utilities regulated by FERC.
  I believe these simple, commonsense issues, when posed by FERC to an 
RTO/ISO that is seeking approval for a rate, charge, or rule, will 
instill a much stronger sense of cost accountability. The bottom line, 
as I see it, is that this simple bill will likely yield substantial 
benefits for consumers and for many regional economies.
  I urge my colleagues to join me in pushing for adoption of the 
Consumer Protection and Cost Accountability Act.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2660

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Consumer Protection and Cost 
     Accountability Act''.

     SEC. 2. REQUIREMENTS RELATING TO TRANSMISSION ORGANIZATIONS.

       (a) Definitions.--In this Act:
       (1) Commission.--The term ``Commission'' means the Federal 
     Energy Regulatory Commission.
       (2) Lowest reasonable cost.--The term ``lowest reasonable 
     cost'' means the lowest total delivered cost to consumers 
     consistent with the provision of reliable service.
       (3) Transmission organization.--The term ``Transmission 
     Organization'' has the meaning given the term in section 3 of 
     the Federal Power Act (16 U.S.C. 796).
       (b) Rate and Charges; Schedules; Suspension of New Rates.--
     Section 205 of the Federal Power Act (16 U.S.C. 824d) is 
     amended by adding at the end the following:
       ``(g) Requirements Relating to Transmission 
     Organizations.--
       ``(1) Definition of lowest reasonable cost.--In this 
     subsection, the term `lowest reasonable cost' means the 
     lowest total delivered cost to consumers consistent with the 
     provision of reliable service.
       ``(2) Consideration of transmission organization rates.--
     With respect to determining whether a rate or charge made, 
     demanded, or received (including any rule or regulation 
     promulgated by a Transmission Organization relating to a rate 
     or charge made, demanded, or received) is consistent with 
     each requirement described in subsection (a) or section 206, 
     as applicable, the Commission shall consider whether the rate 
     or charge (including each rule or regulation relating to the 
     rate or charge) would enable the Transmission Organization to 
     provide, or facilitate the provision of, reliable service to 
     consumers at the lowest reasonable cost.
       ``(3) Consideration of transmission organization rate 
     changes.--In determining whether any filing by a Transmission 
     Organization to establish or change a rate or charge made, 
     demanded, or received (including any rule or regulation 
     promulgated by a Transmission Organization relating to a rate 
     or charge made, demanded, or received) is consistent with 
     each requirement described in subsection (a), the Commission 
     shall consider whether the rate or charge (including each 
     rule or regulation relating to the rate or charge) would--
       ``(A) provide consumer benefits that outweigh any 
     anticipated direct or indirect costs to consumers, as 
     demonstrated by a cost-benefit analysis to be submitted by 
     the Transmission Organization to the Commission; or
       ``(B) have only a de minimus impact on the total delivered 
     costs to consumer.
       ``(4) Biennial audits.--The Commission shall ensure that 
     each Transmission Organization is subject to biennial, 
     independent audits that--
       ``(A) include--
       ``(i) an assessment of the performance of the Transmission 
     Organization; and
       ``(ii) recommendations to lower the costs and improve the 
     performance of the Transmission Organization; and
       ``(B) are made available to the public.''.
       (c) Annual Reports.--Not later than 1 year after the date 
     of enactment of this Act, and annually thereafter, the 
     Commission shall submit to the appropriate committees of 
     Congress a report describing each determination of the 
     Commission with respect to whether each Transmission 
     Organization provides, or facilitates the provision of, 
     reliable service at the lowest reasonable cost to consumers.
                                 ______