Consumer groups ask Congress, FERC to investigate rising electricity prices

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Arguing that high electricity rates are forcing a growing number of low-income consumers to choose between energy, medicine and health care, the American Public Power Association, the National Consumer Law Center, Public Citizen and other consumer groups asked Congress and FERC to investigate electricity prices and protect consumers.

"While there are a number of reasons behind high electricity rates, one major contributor is the deregulated electricity markets," the groups said in a Nov. 3 news release. "The 42 million consumers in full retail choice states served by Regional Transmission Organizations are being hit hardest — their rates are 55 percent higher than those in regulated states, a gap that has been increasing, according to data from the Energy Information Administration."

"At a time when consumers are facing extreme hardships from rising electricity costs and growing numbers face shut-offs, FERC must assure electric rates are just and reasonable," said APPA President Mark Crisson. "The promises of deregulation — competition and lower prices — have not been kept. While energy costs across the country have risen, the electric rates in deregulated markets have climbed faster than the rates in regulated areas."

A recent survey of low-income households by the National Energy Assistance Directors Association found the percentage of people who sacrificed food to afford electricity bills has increased from 22% to 32% since 2003. The percentages of those forgoing medical or dental care or prescription medicine also increased, the survey found. Electric bills have risen since 2007, and almost half the respondents either skipped or paid less than the amount of their total energy bill, the survey found.

"Last year, the number of consumers unable to pay utility bills reached record levels and this trend shows no signs of letting up given the current economic climate," said John Howat of the National Consumer Law Center. "Nobody, no matter what your income level, should be forced to choose between medical care and keeping the lights on in their home."

A recent survey by the National Association of Regulatory Utility Commissioners covering 42 million electricity customers nationwide found that 1 in 5 had past-due electric bills, the consumer groups said. Data collected by the National Consumer Law Center shows that, in Pennsylvania, the number of terminations of utility service jumped 73% from 2004 to 2008. In Ohio, applications for the state's energy affordability program have increased 63% since 2003. In Rhode Island, service disconnections for nonpayment were the highest of any year on record in 2008, and 21% of those accounts were not restored.

APPA and the other groups charged that, while consumers struggle to pay their electricity bills, the deregulated markets serving about two-thirds of the country "continue to create opportunities for excessive profits for a handful of companies that own generating plants. As Congress works toward passage of federal climate legislation, consumers in these markets will also pay for the additional layer of windfall profits that will result from a carbon allowance cap-and-trade system, according to a recent study by Synapse Energy Economics."

The 10 groups noted that despite numerous requests for an investigation into rate disparities and escalating costs in areas served by RTOs from consumer, business and public interest groups, "FERC has taken little action. FERC is the federal agency charged with regulating wholesale electric power markets and is required by the Federal Power Act to ensure that the rates consumers pay are fair and reasonable."

The organizations — APPA, the National Consumer Law Center, Public Citizen, the Alliance for Affordable Energy, Citizen Power, Democracy and Regulation, the Empowerment Center of Greater Cleveland Inc., the Public Utility Law Project of New York Inc., TURN (The Utility Reform Network) and the Virginia Citizens Consumer Council — are urging consumers to call their senators and representatives in Congress to demand that FERC act to protect consumers.