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Senate panel passes FERC rate challenge, LNG export bills

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Senate panel passes FERC rate challenge, LNG export bills

The U.S. Senate Energy and Natural Resources Committee passed a bill March 8 that would allow consumers to challenge power rate changes that take effect without approval by a majority of Federal Energy Regulatory Commission members.

The committee by voice vote approved Senate Bill 186, entitled the Fair Ratepayer, Accountability, Transparency and Efficiency Standards Act, or Fair RATES Act. The bill would ensure that consumers and other stakeholders can protest energy rate changes under the Federal Power Act that take effect even if FERC fails to issue an order approving or denying the rates.

If FERC has an even number of members and is deadlocked whether to approve new rates, the commission cannot issue an official order accepting or rejecting the rates. Despite the lack of an official order, the new rates become effective by operation of law, barring the public from challenging them either through a request for rehearing or a subsequent appeal to a federal court.

S. 186 would allow appeals of new rates even if FERC deadlocks on approving them.

"In baseball, a tie goes to the runner and my legislation would ensure that when it comes to electricity rates, a tie doesn't go against the consumer," said U.S. Sen. Edward Markey, D-Mass., who sponsored the Senate bill. "We must ensure that ratepayers are protected from unjust and unreasonable increases in electricity rates."

A spokesperson for Markey did not respond to questions on when the full Senate may vote on S. 186.

In January 2017, the U.S. House of Representatives passed a companion bill to the Fair RATES Act that was introduced by Rep. Joe Kennedy III, D-Mass., in response to a controversial forward capacity auction in ISO New England for the 2017-2018 commitment period. Critics of the auction said Energy Capital Partners LLC announced the closure of its Brayton Point coal-fired plant in Massachusetts shortly after buying the facility to push up capacity prices for the company's other power plants.

In September 2014, a four-member FERC voted 2-2 on accepting the auction results, meaning the commission could not issue a final order that could be challenged. The lack of an order allowed the rates to take effect by operation of law despite pushback from consumer advocates.

In addition to S. 186, the Senate energy committee passed a handful of other energy-related bills on March 8. The committee voted 13-10 in favor of S. 1981, which would amend the Natural Gas Act to speed approval of small-scale LNG exports totaling no more than 51.1 billion cubic feet per year. That bill was introduced by Republican senators Bill Cassidy and John Kennedy of Louisiana and Marco Rubio of Florida.

The committee also held an en bloc voice vote in favor of S. 79, which would establish a pilot program to identify security vulnerabilities of certain energy sector entities; S. 1457, which would amend the Energy Policy Act of 2005 to direct the Secretary of Energy to conduct demonstration projects related to advanced nuclear reactor technologies; and S. 2503, which would establish U.S. Department of Energy policy for science and energy research and development programs and reform management and technology transfer programs at the DOE's national laboratories.