Hoeven Leads Group of 22 Senators in Pressing FERC to Maintain State, Local Control of Electricity Market

Senators Urge FERC to Amend DER Proposal to Ensure More Affordable and Reliable Energy for Consumers

WASHINGTON – Senator John Hoeven today led a group of 22 senators in urging the Federal Energy Regulatory Commission (FERC) to maintain long-standing state and local authority over retail electricity markets. In a letter to the FERC Chairman, the senators outlined the need to maintain local regulatory authority and amend FERC’s proposal that allows third-parties to aggregate distributed energy resources (DER), such as solar and battery panels, and sell electricity on the wholesale market. Hoeven led the letter after hearing concerns from rural electric cooperatives that the rule could interfere with state and local authorities over distribution utilities. 

“While allowing DERs into the wholesale market can encourage innovation, the aggregation of these resources should be determined at the local and state level to ensure that there is no adverse impact on reliability, or higher costs for consumers,” said Hoeven. “The Federal Power Act established important precedent in ensuring that local distribution utilities, like rural electric cooperatives, have jurisdiction of the wholesale market. This local control helps to better ensure that consumers have access to safe, reliable and affordable energy.”

“Electric cooperatives are so thankful for Senator Hoeven’s leadership and ability to garner support and bring attention to this issue. Senator Hoeven understands our industry, cooperatives and the challenges of providing power to rural America,” said Josh Kramer, general manager and executive vice president of the North Dakota Association of Rural Electric Cooperatives.  “It is important that local decisionmakers, who are entrusted with ensuring affordable, safe and reliable electricity, are able to continue to exercise that responsibility.”

Currently, the Federal Power Act provides for state and local regulatory authority over retail electricity sales and local distribution service. That means the relevant electric retail regulatory authority (RERRA), which includes state public utilities commissions, municipal boards or co-op boards, establish policy regarding the participation of DER aggregations in the wholesale market. 

The senators warned that FERC’s proposal could lead to:

  • System disruptions and the overloading of distribution lines that were not designed for independent DER aggregations.
  • Increased costs for consumers should distribution systems require adaptations to accommodate DER aggregations.
  • Increased administrative costs to implement new rate structures to allocate potential increased capital and operating costs efficiently and fairly among local distribution utility consumers.

In addition to Hoeven, the letter was signed by Senators John Barrasso, Roy Blunt, John Boozman, Shelley Moore Capito, Bill Cassidy, Kevin Cramer, Mike Crapo, Steve Daines, Mike Enzi, Joni Ernst, Deb Fischer, Chuck Grassley, Cindy Hyde-Smith, James Inhofe, James Lankford, Lisa Murkowski, Jim Risch, Mike Rounds, John Thune, Thom Tillis, and Roger Wicker. 

You can read the text of the letter by clicking here.