Groups Ranging From Public Citizen To R Street Ask Congress For Study Of RTO Impacts On Retail Customers

Several groups ranging from Public Citizen to R Street Institute and the Energy Choice Coalition have requested that U.S. congressional leaders direct the Government Accountability Office (GAO) or other independent organization, "to examine the cost and reliability impacts of wholesale markets."

The letter cites wholesale and retail restructuring and states, "the impacts on customer bills appear to have been mixed."

The letter states, "Retail competition policy is also in a state of limbo; however, the impacts of retail competition are not the focus of this letter."

"The study we request should investigate the cost impacts of federal policy regarding market structure, namely the net benefits to retail consumers resulting from the formation of Regional Transmission Organizations (RTOs) and Independent System Operators (collectively 'RTOs'). At minimum, it should examine how existing RTO market structures have impacted the cost of electricity to retail consumers. We also ask that the study explore the reliability impacts of wholesale market structure and, if resources allow, develop a set of best practices regarding RTO expansion," the letter said

The groups in the letter alleged that, "When members of this group asked FERC for a meeting on this issue, FERC staff replied that 'the Commission is not inclined at this time to commission that type of broader study.'"

The letter states, "More than two decades ago, FERC took ambitious steps to open competitive markets at the wholesale level, with the promise that FERC’s promotion of competition would 'ensure that electricity consumers pay the lowest price possible for reliable service.' Many states also expanded competition at the retail level in search of consumer savings. This was a bold and unprecedented experiment in electricity regulation, but the impacts on customer bills appear to have been mixed. At the wholesale level, the electricity industry now finds itself in a state of limbo -- about two-thirds of the country is served by competitive wholesale markets and the rest by traditional, regulated utility monopolies."

"Regulators at FERC and the states cannot fulfill their statutory duties without understanding the fundamental relationship between market structure and the cost and reliability of electricity," the letter said

Signing the letter were the following groups:

Electricity Consumers Resource Council
Energy Choice Coalition
Public Citizen
Association of Businesses Advocating for Tariff Equity
Carolina Utility Customers Association
Conservative Coalition for Climate Solutions 
Conservative Energy Network
Heritage Action for America
Industrial Energy Consumers of Pennsylvania
Louisiana Energy Users Group
R Street Institute