Public Advocate Files Complaint Against Effort to Eliminate Electric Power Market Monitor

Move Could Drive Up Electric Rates

Newark, N.J.— In a joint complaint filed April 17, 2007, at the Federal Energy Regulatory Commission (FERC ), Public Advocate Ronald K. Chen, along with a host of consumer advocacy groups, called on the FERC to ensure that the monitoring unit established to help prevent abuse in New Jersey’s regional electric energy market is not dismantled or hindered.

“With electric commodity rates up approximately 80 percent in the last three years, I am deeply troubled by a move to eliminate the independence and effectiveness of the monitor that oversees most of the region’s electricity markets,” Chen said. “This latest action to hamper oversight of the electric power market is totally unacceptable and we will fight it with all of our agency’s resources.”

The concern arises from recent statements from Joseph Bowring, head of PJM Interconnection’s Market Monitoring Unit, which oversees the nation’s largest electricity market.

Bowring recently told the FERC that PJM management is considering replacing the current internal monitor’s oversight with an outside monitor. He also said the unit has been obstructed from gathering and producing information about the electric markets in a timely manner.

The monitoring unit is vital to protecting ratepayers from any one utility gaining too much market power. PJM, the country’s biggest electricity system operator, is responsible for almost all electricity supplied to New Jersey. PJM tariffs are approved by the FERC.
“We must have monitors of the region’s electricity markets in place who can act independently,” Chen said. “Stringent oversight demands timely access to information. They must also be able to prevent any entity from exercising undue market power, which was one of my chief concerns during the recent proposed merger of PSE&G and Exelon.”
Bowring said the unit was obstructed by PJM management in providing information for a report issued last month on the “state of electric markets.”

PJM coordinates and directs the operation of electric power systems serving 51 million people in New Jersey, Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.

The complaint calls for the FERC to assure there are no structural modifications to the monitoring unit until an independent investigation is completed by PJM’s Board of Directors into Bowring’s allegations and until a final decision on the structure of the unit is made through the stakeholder process.

Chen said the complaint also states that PJM may not be providing the market monitoring unit with the appropriate staffing and resources to carryout its duties.

The complaint seeks assurances that PJM’s unit has enough personnel and resources to meet its obligations of market monitoring .Without that, consumers can be hurt with unreasonable rate increases, the complaint said.

Chen said he has directed Rate Counsel to pursue all options to ensure maintenance of an independent and effective Market Monitoring Unit.

Chen filed the complaint along with the Allegheny Electric Cooperative, Inc., the District of Columbia Office of the People’s Counsel, Illinois Citizens Utility Board, Indiana Office of Utility Consumer Counsel, Maryland Office of People’s Counsel, Office of the Attorney General of Virginia/Division of Consumer Counsel, Old Dominion Electric Cooperative, Pennsylvania Office of Consumer Advocate, PJM Industrial Customer Coalition, Southern Maryland Electric Cooperative, Inc. Office of the Ohio Consumers’ Counsel, City and towns of Hagerstown, Thurmont and Williamsport, Maryland and the State of Delaware/Division of the Public Advocate.

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The Division of Rate Counsel is a division within the Department of the Public Advocate and represents the interests of consumers of electric, natural gas, water/sewer telecommunications, cable TV service and insurance (residential, small business, commercial and industrial customers). Additional information on this and other utility matters can be found at the Division’s website at http://www.rpa.state.nj.us. The Department of the Public Advocate website is http://www.state.nj.us/publicadvocate.

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