Press Release

Governors John Kitzhaber of Oregon and Jim Geringer of Wyoming, co-leads for energy issues for the Western Governors' Association, expressed their reservations about the proposed rule in a letter to the commission, which is holding a meeting on the issue today in Boise.

The governors said WGA and individual governors are still reviewing the lengthy rule and may have additional comments, but their initial review raised several issues. Among them, the rule would effectively eliminate development of voluntary regional transmission organizations already underway in the West at great expense and effort.

"Expansion of the Commission's authority into state decisions such as resource adequacy and demand response is not warranted. We agree with FERC that more work needs to be done in these areas and significant efforts are underway in the West," the letter stated. "These efforts, which would benefit from FERC's participation, may be undermined by the SMD rule. Rather than imposing an SMD rule from Washington, D.C., we believe FERC should participate in ongoing regional efforts on resource adequacy, transmission planning and demand response."

The governors noted that key elements of the proposal were extrapolated from an effort among several Eastern states. "We have serious concerns about the wisdom and unintended consequences of trying to graft (that) approach on to the huge Western Interconnection that spans parts of three nations," the letter stated, noting several important differences between the Western and Eastern grids.

"FERC's proposal to unravel protections afforded to utilities' native load customers is very troubling," the governors said. "These protections have been carefully crafted by state (Public Utility Commissions) and are time-tested.

"The presently fragile Western economy cannot afford missteps that may result from the unprecedented changes to our electric power system that are embodied in the SMD rule. The uncertainties that would be introduced by the SMD rule may dampen investor confidence and leave the West short of generation."

The governors said if other regions are anxious to implement the new rule, the FERC should test it in those regions to learn from that experience.

The Western Governors' Association is an independent, nonprofit organization representing the governors of 18 states and three U.S.-Flag islands in the Pacific. Through their Association, the Western governors identify and address key policy and governance issues in natural resources, the environment, human services, economic development, international relations and public management.