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Committee Passes LaMalfa Bill to Protect Electric, Natural Gas Ratepayers

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Location: Washington, DC

Rep. Doug LaMalfa (R-CA) today passed his first bill as a Member of the U.S. House of Representatives out of the Agriculture Committee. H.R. 1038, the "Public Power Risk Management Act of 2013", preserves the ability of public power utilities to purchase energy for futures needs at cost-effective rates. The measure passed with unanimous support and is cosponsored by bipartisan lawmakers from around the nation.

"At a tough financial time for our country, the last thing we need is for electrical bills to go up. Today's vote moves forward a bill that protects 49 million Americans from rate increases that would otherwise be caused by red tape and over-regulation," said LaMalfa. "While I first heard of the problems current laws cause some of our local utilities, we rapidly found that public power utilities across the country were affected. I'm pleased that this bill has received such widespread, bipartisan support, and we'll continue working to ensure that public power utilities have adequate access to energy sources."

The Dodd-Frank financial reform legislation was intended to protect the nation from another financial crisis. However, the bill's provisions inadvertently placed an excessive regulatory burden on public power utilities and limited their ability to purchase energy for future needs. While private utilities may purchase up to $8 billion worth of energy for future needs without falling under new reporting and compliance costs, the threshold for public utilities was set at $25 million. The added costs associated with selling future energy supplies to public power utilities scared away many sellers, artificially constricting the market and increasing costs to ratepayers.

The bill has been widely supported by public power utilities around the nation:

"This legislation provides the necessary balance to ensure that the ratepayers continue to receive a stable and cost-effective fuel and energy supply," said Ronald Nichols, general manager of the Los Angeles Department of Water and Power.

"This will put our members on a level playing with other power utilities and will help ensure that they can adequately plan for the future and continue to provide reliable service and affordable rates to our customers," said Mark Crisson, president of the American Public Power Association

"Unfortunately, the application of these rules to municipal utilities has significantly increased our exposure to commercial risk by severely restricting the number and types of counterparties we can do business with," Northern California Power Agency General Manager James Pope said.

"Perhaps the burden on public power in New York State was not clearly understood when these regulations were enacted, but now that the negative effects are plain, we need Congress to act," added New York Municipal Power Agency General Manager Tony Modafferi.


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