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The following letter shows the ongoing battle regarding what/whether there should be a fourth large RTO in the West? I've provided it as text below and as an attachment in Rich Text if you wish to have an easier read by opening it up. The document has been scanned for viruses. Dsg October 10, 2001 The Honorable Pat Wood, III, Chairman The Honorable William Massey, Commissioner The Honorable Linda Breathitt, Commissioner The Honorable Nora Brownell, Commissioner Federal Energy Regulatory Commission 888 First Street, N.E. Washington, D.C. 20426 Dear Commissioners: We are writing to express our strong reservations regarding the Federal Energy Regulatory Commission's (FERC) movement toward mandating four (West, Midwest, Northeast, Southeast) regional transmission organizations (RTOs). While we acknowledge that RTOs could, in theory, lead to a more efficient and well-functioning wholesale electricity market, we are concerned that FERC is promoting RTOs in the belief that they are inherently beneficial, with little regard for whether the operational details associated with the various RTOs will actually lead to lower costs or increased efficiency and reliability when applied in the real world. We don't believe RTOs are inherently good or bad. Whether the benefits of an RTO outweigh the costs depends on the details of a given proposal and the attributes of a given market. We are concerned that full consideration of those issues will be sacrificed under an artificial FERC deadline and a national perspective that disregards the specific features of the Pacific Northwest grid. As Members of Congress from the Northwest, we are particularly interested in, and have been following closely, the development of RTO West. We commend the inclusive stakeholder process that has brought together the RTO West filing utilities, urban and rural public utilities, industrial customers, Indian tribes, and other interested consumers to debate the details of RTO West. There is still a vigorous debate among the stakeholders in our region on issues such as pricing, congestion management, and how much authority RTO West should have to mandate construction, demand-side management or other measures to deal with reliability and congestion problems. While we each have our own opinions about what the result of this debate should be, we are united in the belief that it would be extremely unfortunate if the consensus-building Letter to FERC regarding RTOs October 10, 2001 process in our region was preempted by FERC action that would mandate a West-wide RTO or require that RTO West and WestConnect (formerly Desert Star) merge into a single organization. We would also oppose the FERC setting standardized national rules for RTOs on issues like pricing and congestion management. The Northwest needs the flexibility to do what is best for our region given the unique characteristics of our grid. We still expect the ongoing negotiations to resolve seams issues and similar operational concerns between the three RTOs under consideration in the Western United States will meet the requirements for an efficient wholesale market to function. Finally, we would respectfully request that the FERC mandate independent, cost-benefit analyses for each RTO. It is important for stakeholders and consumers to see a bottom line evaluation of the cost and benefits to end-use consumers in each affected state. This is especially true for ratepayers in the Northwest who are being subjected to rate increases of 20-40 percent or more and are dubious of any overhaul of how electricity is delivered if it could mean even further price hikes. Vigorous, independent cost-benefit studies must be done for all RTOs if they are to have any credibility. While the theoretical benefits of an RTO (like increased reliability and efficiency) may ultimately exist, those benefits may be outweighed by increased costs to consumers for generation or transmission service. This is particularly important for our region, which, due to the presence of the Bonneville Power Administration, has generally had a reliable, open-access transmission system even in the absence of an RTO. We are pleased that RTO West has commissioned an independent cost-benefit analysis, but it is still unclear whether the scope of the report will be satisfactory. Thank you, in advance, for your careful consideration of our concerns. We would appreciate an opportunity to meet with you to discuss these issues further and look forward to working with you to ensure a well-functioning wholesale market that doesn't adversely impact consumers. Sincerely, __________________ __________________ PETER DeFAZIO PATTY MURRAY Member of Congress United States Senator __________________ __________________ NORM DICKS MAX BAUCUS Member of Congress United States Senator Letter to FERC regarding RTOs October 10, 2001 __________________ __________________ JIM McDERMOTT LARRY CRAIG Member of Congress United States Senator __________________ __________________ JENNIFER DUNN RON WYDEN Member of Congress United States Senator ______________________ __________________ GEORGE NETHERCUTT MIKE CRAPO Member of Congress United States Senator ___________________ __________________ DOC HASTINGS MARIA CANTWELL Member of Congress Member of Congress ____________________ __________________ EARL BLUMENAUER DARLENE HOOLEY Member of Congress Member of Congress __________________ _________________ JAY INSLEE ADAM SMITH Member of Congress Member of Congress __________________ __________________ BRIAN BAIRD GREG WALDEN Member of Congress Member of Congress Letter to FERC regarding RTOs October 10, 2001 __________________ ___________________ MICHAEL SIMPSON C.L. "BUTCH" OTTER Member of Congress Member of Congress __________________ ___________________ RICK LARSEN CONRAD BURNS Member of Congress United States Senator __________________ DAVID WU Member of Congress
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