Hoeven leads 22 senators in urging FERC to consider state, local authorities in rulemaking

A final rule from the Federal Energy Regulatory Commission (FERC) could negatively interfere with state and local authorities over distribution utilities, said U.S. Sen. John Hoeven (R-ND) and 22 of his colleagues last week.

“We write to express our concerns and to urge you to preserve state and local authorities over distribution utilities with respect to distributed energy resources (DER) aggregators” in a pending proposed rulemaking, wrote Sen. Hoeven and a bipartisan contingent in a May 7 letter sent to FERC Chairman Neil Chatterjee.

FERC’s previous Order No. 841 doesn’t directly address third-party aggregators of distributed energy resources, such as solar panels. However, the senators wrote that order does adopt rules governing wholesale market participation by “behind-the-meter” and other electric storage resources on local utility distribution systems that might be aggregated for such purposes under FERC’s forthcoming and separate rulemaking.

“We respectfully encourage the commission not to adopt any final rule that would authorize the aggregation of such resources by entities other than the local distribution utility without authorization by the appropriate state or local regulator,” the senators wrote.

Among the members who joined Sen. Hoeven in signing the letter were U.S. Sens. Joni Ernst (R-IA), Roger Wicker (R-MS), Shelley Moore Capito (R-WV), Mike Rounds (R-SD), Steve Daines (R-MT), Thom Tillis (R-NC), Roy Blunt (R-MO) Deb Fischer (R-NE) and Bill Cassidy (R-LA).

The lawmakers said they shared “the concerns of state regulators, public power and rural utility providers that the final rule could have a negative effect on state and local authorities’ ability to regulate retail and distribution service.”

And they warned that FERC’s new proposal could lead to problems such as system disruptions and overloaded distribution lines, as well as increased costs for consumers and higher administrative costs for companies to implement new rate structures.

“While allowing DERs into the wholesale market can encourage innovation, the aggregation of these resources should be determined at the local and state level to ensure that there is no adverse impact on reliability, or higher costs for consumers,” Sen. Hoeven said in a separate statement last week, adding that “local control helps to better ensure that consumers have access to safe, reliable and affordable energy.”