Federal Regulators Deny Complaint over Glut in Southeastern Electric Supply – Without Denying the Excess Supply Exists
“Regulatory Contortion” allows Duke Energy, others to keep gouging customers by building power plants instead of sharing regional resources as the regulators have urged
Statement by Director Jim Warren:
DURHAM, NC – Despite huge amounts of excess power generation capacity on hand now and for decades to come – and dozens of large power plants sitting idle most of the year – protected monopoly utilities across the southeast keep building more plants instead of buying power from each other as federal regulators have urged.
Today those regulators denied a complaint by watchdog group NC WARN without contesting the federal data we used to show gross oversupply across the Southeast.
In a classic Catch-22, the Federal Energy Regulatory Commission (FERC) denied our request for an independent study into how many billions could be saved annually if southeastern utilities begin sharing power supply through regional cooperation, as FERC has pressed for. FERC says we didn’t supply enough data to argue for the study, even though that very study is the only path to get all of the data on the table.
FERC is practicing regulatory contortion.
NC WARN cited utility and federal data showing that southeastern utilities maintain power plant capacities ranging from 24 to 37 percent above the highest usage of the year. Those reserves are over twice as high as the industry standard of 14-15 percent, and for all but the very hottest and coldest months, excess capacity goes far higher in the Southeast.
Again, the federal data we DID supply showing gross overcapacity across the region was not contested. Nor did Duke Energy provide any evidence to counter those numbers.
A recent study showed that regional sharing of resources would save customers $1.4 billion over ten years in the deep south region.
The regulators admit that they urge utilities to share resources and that they have jurisdiction to require them to do so.
But they claim they want to continue relying on voluntary regional cooperation instead of acting to protect electricity customers. These monopoly utilities who largely control their state rate-making commissions will continue price gouging in the short and long term.
We are considering additional steps to pursue this issue.