NEPPA’s Bottiggi Testifies at Hearing on "Fair RATES Act," Committee Advances Legislation

Bill Bottiggi, General Manager of Braintree Electric Light Department, testified before the subcommittee on behalf of NEPPA in support of the bill. He described the recent experience, in New England’s forward capacity market auction, that escaped review due to a deadlock. Despite allegations of manipulation in the capacity auction, a four-member FERC was split on whether the resulting rate – in which capacity costs tripled to $3 billion for the region – was "just and reasonable" under the Federal Power Act. More broadly, Bottiggi expressed concerns about mandatory capacity markets in general and advocated for public power to be able to self-supply capacity.

Subcommittee Chair Ed Whitfield (R-KY) asked about the manipulation allegations, then focused on why the eastern RTOs felt it was necessary to implement mandatory capacity markets while other regions of the country have not. Bottiggi explained that long-term contracts drive new construction outside mandatory capacity markets, as opposed to short-term price signals from the capacity market – a key flaw in the design of these so-called markets. When asked whether mandatory capacity markets were necessary to ensure reliability (as the RTO has claimed), Bottiggi said, "Utilities have been around since the 1800s. The capacity market has been in effect since 2007. I don’t think the huge windfalls to generators are necessary."

Sen. Ed Markey (D-MA) introduced a companion bill, S. 2494, immediately following the hearing.

On Feb. 25, the House Energy and Commerce Committee reported H.R. 2984 by voice vote. In addition to NEPPA, both APPA and NRECA supported the legislation. The bill now moves to the House floor, as part of a suite of non-controversial energy bills that could see action in March. Committee staff have indicated those measures could be included in a conference version of the energy bill if the Senate approves a bill.

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