WASHINGTON, D.C. - The attorneys general of Connecticut and Massachusetts have jointly filed suit against the Federal Energy Regulatory Commission, hoping to end a surcharge that was imposed to encourage the construction of new power plants.
Connecticut's Richard Blumenthal and Massachusett's Thomas Reilly filed their suit with the federal Court of Appeals for the District of Columbia Circuit.
The two say an extra charge on New England ratepayers "breaks the law as well as consumer budgets and our economy."
However, FERC spokesman Bryan Lee said the two AGs were part of a small group of eight entities that didn't accept a settlement agreement drafted to address the states' power concerns. Those eight were greatly outnumbered by 107 entities that agreed to the terms.
The 83-page settlement discusses several methods for ensuring enough power in the two states, but Blumenthal and Reilly publicly stated their reason for filing suit is the surcharge.
Blumenthal claims it unfairly increases rates and enriches plant owners and that it is up to he and Reilly to "stop FERC from inflaming our raging electricity price inferno."
Blumenthal also says the plan will impose "an unnecessary $800 million surcharge on Connecticut ratepayers."
Lee insists the problem isn't between FERC and the attorneys general, but between the attorneys general and the 107 parties that agreed to the settlement.
"Given that they were not among the settling parties, this is not surprising," he said.
He added that the plan is "market-based approach that will allocate the necessary generating capacity" for the states' most demanding days, and that the situation is not a choice between the status quo and a more costly alternative.
"The lack of adequate generation in the region is already costing consumers hundreds of millions of dollars a year, and maintaining the status quo is likely more costly in the long run than the alternative Forward Capacity Market.
"Further, the settlement offers a solution to help forestall inevitable blackouts and brownouts if new generation capacity doesn't come online. If the status quo is maintained, electricity shortages and price spikes are certain.
"The commission has been warning the region for years that it could become the next California."