H. Rept. 114-452 - FAIR RATEPAYER ACCOUNTABILITY, TRANSPARENCY, AND EFFICIENCY STANDARDS ACT114th Congress (2015-2016)
Committee Report
| Report Type: | House Report |
|---|---|
| Accompanies: | H.R.2984 |
| Committees: |
H. Rept. 114-452 - 114th Congress (2015-2016)
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House Report 114-452 - FAIR RATEPAYER ACCOUNTABILITY, TRANSPARENCY, AND EFFICIENCY STANDARDS ACT
[House Report 114-452]
[From the U.S. Government Publishing Office]
114th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 114-452
======================================================================
FAIR RATEPAYER ACCOUNTABILITY, TRANSPARENCY, AND EFFICIENCY STANDARDS
ACT
_______
March 14, 2016.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Upton, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
[To accompany H.R. 2984]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 2984) to amend the Federal Power Act to provide
that any inaction by the Federal Energy Regulatory Commission
that allows a rate change to go into effect shall be treated as
an order by the Commission for purposes of rehearing and court
review, having considered the same, report favorably thereon
without amendment and recommend that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Hearings......................................................... 2
Committee Consideration.......................................... 3
Committee Votes.................................................. 3
Committee Oversight Findings..................................... 3
Statement of General Performance Goals and Objectives............ 3
New Budget Authority, Entitlement Authority, and Tax Expenditures 3
Earmark, Limited Tax Benefits, and Limited Tariff Benefits....... 4
Committee Cost Estimate.......................................... 4
Congressional Budget Office Estimate............................. 4
Federal Mandates Statement....................................... 5
Duplication of Federal Programs.................................. 5
Disclosure of Directed Rule Makings.............................. 5
Advisory Committee Statement..................................... 5
Applicability to Legislative Branch.............................. 5
Section-by-Section Analysis of the Legislation................... 6
Changes in Existing Law Made by the Bill, as Reported............ 6
Purpose and Summary
H.R. 2984, a bill to amend the Federal Power Act to provide
that any inaction by the Federal Energy Regulatory Commission
(FERC) that allows a rate change to go into effect shall be
treated as an order by the Commission for purposes of rehearing
and court review, was introduced by Rep. Joseph P. Kennedy, III
(D-MA) on July 8, 2015.
Background and Need for Legislation
Section 205 of the Federal Power Act (FPA) sets forth
specific processes to set rates for electricity, including
opportunities for the public to protest a rate change filed
with FERC.\1\ Pursuant to the FPA, new rates take effect if
FERC approves them or if FERC fails to issue an order approving
or denying the filed rates by the time statutorily required by
the FPA. The failure to approve or deny a rate may result from
agency delay or, in some limited cases, a vote that results in
a deadlocked Commission, for example a 2-2 vote.\2\ In such
cases, the rates become effective by operation of law, even
when these rates were not approved by a majority of
commissioners.
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\1\16 U.S.C. Sec. 824d.
\2\FERC is generally comprised of 5 commissioners, each of whom is
appointed by the President and confirmed by the U.S. Senate for a 5-
year term. In some circumstances, FERC may operate with less than 5
commissioners. Presently, FERC has only 4 sitting commissioners
resulting from Commissioner Moeller's recent departure.
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The FPA provides administrative redress for members of the
public to protest Commission rate decisions.\3\ However, if
rates become effective by operation of law--for example, as a
result of a deadlocked Commission--the administrative processes
are not available to the public because FERC did not
technically issue an order for the public to protest. In such
cases, there is no legal or administrative avenue for
ratepayers to remedy or protest the rate change. This scenario
has occurred on at least five occasions in the past fourteen
years.
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\3\See sections 205 (16 U.S.C. 824d) and 313 (16 U.S.C. 825l) of
the FPA.
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To resolve this procedural discrepancy, H.R. 2984 amends
the requirement under section 205 of the FPA that a public
utility provide FERC and the public sixty days' notice before
making changes to its rate, charge, or classification
structure. If a lack of action by FERC allows such a change to
take effect, including if FERC allows the 60-day notice period
to expire without taking action, FERC's lack of action will be
treated as though FERC had issued an order accepting the change
for purposes of the right of any party affected by a FERC order
to apply for a rehearing within 30 days. Therefore, the bill
would provide opportunities for rehearing of orders affecting
rates, even in instances where the Commission is deadlocked.
Hearings
The Subcommittee on Energy and Power held a hearing on H.R.
2984 on February 2, 2016. The Subcommittee received testimony
from:
Ann Miles, Director, Office of Energy
Projects, Federal Energy Regulatory Commission;
Max Minzner, General Counsel, Office of the
General Counsel, Federal Energy Regulatory Commission;
Timothy L. Powell, CEP, Director of Land,
GIS and Permits, Williams Company;
Edward Lloyd, Evan M. Frankel Clinical
Professor of Environmental Law, Columbia University
School of Law, on behalf of the New Jersey Conservation
Foundation and Stonybrook Millstone Watershed
Association;
Bill Bottiggi, General Manager, Braintree
Light and Electric Department;
Bill Marsan, Executive Vice President,
General Counsel and Corporate Secretary, American
Transmission Company;
Tyson Slocum, Energy Program Director,
Public Citizen, Inc.; and,
Jeffrey A. Leahey, Esq., Deputy Executive
Director, National Hydropower Association.
Committee Consideration
On February 10 and 11, 2016, the Subcommittee on Energy and
Power met in open markup session and forwarded H.R. 2984 to the
full Committee, without amendment, by a voice vote. On February
24 and 25, 2016, the full Committee on Energy and Commerce met
in open markup session and ordered H.R. 2984 reported to the
House, without amendment, by a voice vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto.
There were no record votes taken in connection with ordering
H.R. 2984 reported. A motion by Mr. Upton to order H.R. 2984
reported to the House, without amendment, was agreed to by a
voice vote.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee held a hearing and made
findings that are reflected in this report.
Statement of General Performance Goals and Objectives
The goal of H.R. 2984 is to amend the Federal Power Act to
provide that any inaction by the Federal Energy Regulatory
Commission that allows a rate change to go into effect shall be
treated as an order by the Commission for purposes of rehearing
and court review.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
2984, would result in no new or increased budget authority,
entitlement authority, or tax expenditures or revenues.
Earmark, Limited Tax Benefits, and Limited Tariff Benefits
In compliance with clause 9(e), 9(f), and 9(g) of rule XXI
of the Rules of the House of Representatives, the Committee
finds that H.R. 2984 contains no earmarks, limited tax
benefits, or limited tariff benefits.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 11, 2016.
Hon. Fred Upton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2984, the Fair
RATES Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Megan
Carroll.
Sincerely,
Robert A. Sunshine
(For Keith Hall, Director).
Enclosure.
H.R. 2984--Fair RATES Act
Under the Federal Power Act (FPA), the Federal Energy
Regulatory Commission (FERC) is responsible for ensuring that
rates, terms, and conditions set by public utilities related to
interstate transmission and sales of electricity are just and
reasonable. Section 205 of that act requires public utilities
to notify FERC of any changes to such rates, terms and
conditions. Under current law, FERC has 60 days to review the
proposed changes and issue an order determining whether the
changes can take effect; parties affected by such orders can
seek a rehearing of FERC's decision and a subsequent review by
an appellate court. If, however, FERC fails to issue an order
within 60 days, any proposed changes take effect automatically.
In the absence of an official decision by FERC, affected
parties cannot request a rehearing.
H.R. 2984 would amend section 205 of the FPA to specify
that any failure by FERC to issue an order related to a
proposed change in rates or other terms would be considered an
order to allow such changes. Thus any affected parties could
seek a rehearing and appellate review of the changes.
By expanding the number of cases in which proposed rate
changes potentially could result in rehearings, H.R. 2984 could
increase FERC's workload. However, based on information from
FERC about the extremely limited number of cases that would be
affected by the proposed change, CBO estimates that any
increased administrative costs to the agency would be
insignificant in any given year. Further, because FERC recovers
100 percent of its costs through user fees, any change in that
agency's costs (which are controlled through annual
appropriation acts) would be offset by an equal change in fees
that the commission charges, resulting in no net change in
federal spending.
Because enacting H.R. 2984 would not affect direct spending
or revenues, pay-as-you-go procedures do not apply. CBO
estimates that enacting H.R. 2984 would not increase net direct
spending or on-budget deficits in any of the four consecutive
10-year periods beginning in 2027.
H.R. 2984 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Megan Carroll.
The estimate was approved by H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Duplication of Federal Programs
No provision of H.R. 2984 establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Disclosure of Directed Rule Makings
The Committee estimates that enacting H.R. 2984
specifically directs to be completed no rule makings within the
meaning of 5 U.S.C. 551.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This section provides the short title of ``Fair Ratepayer
Accountability, Transparency, and Efficiency Standards Act'' or
the ``Fair RATES Act.''
Section 2. Amendment to the Federal Power Act
Section 2 amends the requirements under section 205 of the
Federal Power Act that a public utility provide FERC and the
public 60 days' notice before making changes to its rate,
charge, or classification structure. Specifically, if a lack of
action by FERC allows a change to take effect, including if
FERC allows the 60-day notice period to expire, such lack of
action will be treated as if FERC had issued an order accepting
the change, thereby allowing any affected party to apply for
rehearing within 30 days.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
FEDERAL POWER ACT
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PART II--REGULATION OF ELECTRIC UTILITY COMPANIES ENGAGED IN INTERSTATE
COMMERCE
* * * * * * *
rate and charges; schedules; suspension of new rates
Sec. 205. (a) All rates and charges made, demanded, or
received by any public utility for or in connection with the
transmission or sale of electric energy subject to the
jurisdiction of the Commission, and all rules and regulations
affecting or pertaining to such rates or charges shall be just
and reasonable, and any such rate or charge that is not just
and reasonable is hereby declared to be unlawful.
(b) No public utility shall, with respect to any transmission
or sale subject to the jurisdiction of the Commission, (1) make
or grant any undue preference or advantage to any person or
subject any person to any undue prejudice or disadvantage, or
(2) maintain any unreasonable difference in rates, charges,
service, facilities, or in any other respect, either as between
localities or as between classes of service.
(c) Under such rules and regulations as the Commission may
prescribe, every public utility shall file with the Commission,
within such time and in such form as the Commission may
designate, and shall keep open in convenient form and place for
public inspection schedules showing all rates and charges for
any transmission or sale subject to the jurisdiction of the
Commission, and the classification, practices, and regulations
affecting such rates and charges, together with all contracts
which in any manner affect or relate to such rates, charges,
classifications, and services.
(d) Unless the Commission otherwise orders, no change shall
be made by any public utility in any such rates, charges,
classification, or service, or in any rule, regulation, or
contract relating thereto, except after sixty days' notice to
the Commission and to the public. Such notice shall be given by
filing with the Commission and keeping open for public
inspection new schedules stating plainly the change or changes
to be made in the schedule or schedules then in force and the
time when the change or changes will go into effect. The
Commission, for good cause shown, may allow changes to take
effect without requiring the sixty days' notice herein provided
for by an order specifying the changes so to be made and the
time when they shall take effect and the manner in which they
shall be filed and published. Any absence of action by the
Commission that allows a change to take effect under this
section, including the Commission allowing the sixty days'
notice herein provided to expire without Commission action,
shall be treated as an order issued by the Commission accepting
such change for purposes of section 313.
(e) Whenever any such new schedule is filed the Commission
shall have authority, either upon complaint or upon its own
initiative without complaint at once, and, if it so orders,
without answer or formal pleading by the public utility, but
upon reasonable notice to enter upon a hearing concerning the
lawfulness of such rate, charge, classification, or service;
and, pending such hearing and the decision thereon the
Commission, upon filing with such schedules and delivering to
the public utility affected thereby a statement in writing of
its reasons for such suspension, may suspend the operation of
such schedule and defer the use of such rate, charge,
classification, or service, but not for a longer period than
five months beyond the time when it would otherwise go into
effect; and after full hearings, either completed before or
after the rate, charge, classification, or service goes into
effect, the Commission may make such orders with reference
thereto as would be proper in a proceeding initiated after it
had become effective. If the proceeding has not been concluded
and an order made at the expiration of such five months, the
proposed change of rate, charge, classification, or service
shall go into effect at the end of such period, but in case of
a proposed increased rate or charge, the Commission may by
order require the interested public utility or public utilities
to keep accurate account in detail of all amounts received by
reason of such increase, specifying by whom and in whose behalf
such amounts are paid, and upon completion of the hearing and
decision may by further order require such public utility or
public utilities to refund, with interest, to the persons in
whose behalf such amounts were paid, such portion of such
increased rates or charges as by its decision shall be found
not justified. At any hearing involving a rate or charge sought
to be increased, the burden of proof to show that the increased
rate or charge is just and reasonable shall be upon the public
utility, and the Commission shall give to the hearing and
decision of such questions preference over other questions
pending before it and decide the same as speedily as possible.
(f)(1) Not later than 2 years after the date of the enactment
of this subsection and not less often than every 4 years
thereafter, the Commission shall make a thorough review of
automatic adjustment clauses in public utility rate schedules
to examine--
(A) whether or not each such clause effectively
provides incentives for efficient use of resources
(including economical purchase and use of fuel and
electric energy), and
(B) whether any such clause reflects any costs other
than costs which are--
(i) subject to periodic fluctuations, and
(ii) not susceptible to precise
determinations in rate cases prior to the time
such costs are incurred.
Such review may take place in individual rate proceedings or in
generic or other separate proceedings applicable to one or more
utilities.
(2) Not less frequently than every 2 years, in rate
proceedings or in generic or other separate proceedings, the
Commission shall review, with respect to each public utility,
practices under any automatic adjustment clauses of such
utility to insure efficient use of resources (including
economical purchase and use of fuel and electric energy) under
such clauses.
(3) The Commission may, on its own motion or upon complaint,
after an opportunity for an evidentiary hearing, order a public
utility to--
(A) modify the terms and provisions of any automatic
adjustment clause, or
(B) cease any practice in connection with the clause,
if such clause or practice does not result in the economical
purchase and use of fuel, electric energy, or other items, the
cost of which is included in any rate schedule under an
automatic adjustment clause.
(4) As used in this subsection, the term ``automatic
adjustment clause'' means a provision of a rate schedule which
provides for increases or decreases (or both), without prior
hearing, in rates reflecting increases or decreases (or both)
in costs incurred by an electric utility. Such term does not
include any rate which takes effect subject to refund and
subject to a later determination of the appropriate amount of
such rate.
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[all]