Until a few weeks ago, it appeared a plan to create a “Standard Market Design” by the Federal Energy Regulatory Commission (FERC) would take effect July 1.
Now, behind an aggressive lobbying effort on the part of Southeast and Northwest states that plan to create a single market for wholesale electricity throughout the country could be delayed until at least 2005.
Such a delay is bad news for Rhode Island and all of our New England neighbors, who for years have operated at a competitive disadvantage versus other states when it comes to the costs of electricity.
We urge U.S. Sen. Jack Reed to continue in his support for the FERC proposal and we call on U.S. Sen. Lincoln Chafee to join his Senate colleague.
The FERC proposal would essentially even the playing field with regard to wholesale electricity rates, a move that Elia Germani, chairman of the Rhode Island Public Utilities Commission, sees as critical for economic development efforts here.
Rhode Island, after all, has enjoyed some success in drawing the likes of Toray Plastics, Amgen Corp. and Dow Chemical here to do business.
“Imagine how we could be more attractive to biotech companies if we could offer them power at the same rates as the Northwest or Southeast,” said Germani.
These companies locate here and expand here for a lot of reasons, not the least of which is our quality of life and a talented and available work force. They do not come because the electricity is cheap.
During a panel discussion Providence Business News organized last month to discuss issues related to manufacturing, Robert S. Leach, a senior vice president from Toray Plastics, spoke to the impact of electricity costs here in Rhode Island.
“Our electric bill is around $14 million a year.… Obviously, it is something we should be trying to work on. We’re not going to be as low as South Carolina, I know that … but how do we address the quality issues and … the overall cost.”
It is fortunate that the federal government, through the FERC proposal, decided to address some of these concerns – to make a legitimate attempt at making an inequitable system more equitable.
But to now see that potential progress halted is not only demoralizing, but also economically damaging.
The opposition to the FERC proposal from the Southeast and Northwest states should come as no surprise. They’ve got a good thing going. The system in place has served them well.
It’s time to change the system.
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