U.S. Representative Jeff Denham (R-Turlock) today announced the introduction of legislation with Rep. Doug LaMalfa (CA-01) to protect public power ratepayers from cost increases by increasing the sources from which public power entities may purchase energy for future needs. The bill, H.R. 1038 -- the Public Power Risk Management Act, will eliminate red tape inadvertently imposed on public power entities by the Dodd-Frank financial reform bill in 2010.
"I want to help our public utilities continue to provide low utility rates to our families, businesses and schools in the Valley," said Denham. "Ensuring long term, low prices on commodities such as natural gas and oil is critical to providing consistent rates for utility users like those in Modesto and Turlock who have benefited from the reliable and low cost electricity provided by MID and TID. I thank Rep. LaMalfa for his work in identifying and introducing the Public Power Risk Management Act to prevent electricity prices from rising for public power users in the Valley and across the country."
The bipartisan measure was introduced by Rep.Doug LaMalfa, and is cosponsored by Rep. Denham as well as by Reps. Costa (D-CA), Garamendi (D-CA), and Luetkmayer (R-MO). Public power entities serve over 49 million customers across the nation, and the existing rules could potentially drastically limit the ability of many smaller entities to engage in commodity and derivatives transactions to supply future power needs..
"The Public Power Risk Management Act will keep electrical rates from increasing by giving public power agencies greater flexibility to purchase power at lower costs. The Dodd-Frank financial reform bill inadvertently limited the ability of public power entities to purchase energy from other producers and, if uncorrected, will lead to higher electrical rates," said Rep. LaMalfa. "A financial reform bill aimed at Wall Street should not result in higher electrical costs. This is an issue that affects not only millions of Californians, but public power ratepayers across the nation."
The bill is widely supported by public power providers, who are already seeing the negative impacts of the Dodd-Frank requirements.
"This legislation simply allows public power utilities to appropriately hedge their commercial operations risks," said Turlock Irrigation District General Manager Casey Hashimoto. "This legislation will go a long way towards our goal of keeping electricity rates low and stable for Turlock. TID appreciates the leadership of Reps. LaMalfa, Denham, Costa and the other bill sponsors."
"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.