U.S. Electric Transmission System Must Be Upgraded to Meet Consumer Demands According to Expert Panel.

WASHINGTON -- Consumer and Industry Leaders Team with Policymakers To Recommend Electric Transmission System Improvements

A group of senior executives and leading experts from industry, government, and the public interest sector today announced the results of a consensus strategy to improve the nation's electricity transmission system, released by the Consumer Energy Council of America (CECA).

The report by CECA's Transmission Infrastructure Forum, Keeping the Power Flowing: Ensuring A Strong Transmission System to Support Consumer Needs for Cost-Effectiveness, Security and Reliability, found that coordinated regional planning, consumer input in decision making, clearly established jurisdictional boundaries between federal and state regulators, and mandatory reliability standards are critical elements in ensuring that the nation's future electricity needs are met. (A copy of the report can be found on the CECA website, www.cecarf.org.)

"The transmission grid is the backbone of our nation's economy," said CECA President Ellen Berman. "The challenges confronting the transmission system are real, immediate, and consequential, as evidenced by the August 14, 2003 Blackout. To keep the power flowing, we are issuing a broad call for action to government leaders and industry," Berman said.

"The study undertaken by the CECA Transmission Infrastructure Forum will inform consumers on the ways our nation's transmission system is operated. The CECA Forum has recommended policies that are essential to meeting the nation's future electricity requirements in the next decade and policymakers should implement these recommendations," said John Derrick, Chair of the CECA Forum and former Chairman of the Board of PEPCO Holding, Inc.

The CECA Forum determined that future transmission policy should provide for: critically needed consumer input into transmission policy; provision of electricity that is affordable, reliable and environmentally stable by each region of the country; a durable regulatory framework; flexibility for institutional and structural options; clear cost recovery and allocation mechanisms; coordinated regional transmission planning; and the availability of necessary public/private-sector funding of advanced technology research and development.

The CECA Forum recognized that each region of the country has a unique perspective on how it operates and how best to serve its consumers. The CECA Forum was unique in that it evaluated how each region coordinates and plans for transmission improvements and how such processes impact the consumers in the region it serves.

Among the CECA Transmission Infrastructure Forum's key recommendations are the following:

--Congress should mandate transmission reliability standards, either as stand-alone legislation or as part of comprehensive legislation;

--Congress must clarify the jurisdictional roles of FERC, the states and regions which will result in certainty for the "rules of the road" and thus increase investment in the transmission system;

--Regions should adopt default cost recovery and cost allocation mechanisms based on a durable regulatory framework so that certainty is established and rules are not changed mid-stream;

--States should establish performance-based regulatory incentives where the benefits are clearly demonstrated;

--FERC should continue to encourage effective regional transmission planning entities, where appropriate, while recognizing regional differences; and

--The Department of Energy and the Department of Homeland Security should expedite and coordinate national security transmission planning.

Participants in the CECA Transmission Infrastructure Forum included federal policymakers, members of state public utility commissions, and leaders from investor-owned utilities, rural electric cooperatives, municipally-owned utilities, independent transmission companies, independent power producers, state consumer advocates, state energy officials, state legislators, engineering firms, industrial consumers, national laboratories and academia. (A detailed participants list and statements by a cross-section of Forum members is available at www.cecarf.org.)

CECA is the senior public interest energy policy organization in the United States. A leading national and international resource for policy information and analysis, CECA has three decades of experience building consensus among stakeholders and developing policy that serves the public interest.