January 10, 2022

With Heating Prices Expected To Increase This Winter, Gillibrand Joins Colleagues In Urging Federal Energy Regulatory Commission To Protect Consumers From Unfairly High Energy Costs

U.S Senator Kirsten Gillibrand joined colleagues in a bicameral letter urging the Federal Energy Regulatory Commission (FERC) to use its statutory authority to ensure that Americans’ household energy bills are not driven up by energy market manipulation in wholesale natural gas and electricity markets. Almost two years into the coronavirus pandemic, families are experiencing levels of utility debt that are approximately 67 percent higher than in the average year, and last month, the U.S. Energy Information Administration (EIA) predicted that some households’ winter heating bills may rise by as much as 39 percent. Increased energy burdens will most affect low-income families and Black and Hispanic households and pose a serious economic, racial, and health justice issue

“For too long, the federal government has allowed too many utility companies to put profit above the public,” said the lawmakers. “We have a responsibility to ensure that everyone has access to safe living conditions, and we cannot let corporate greed or a quest for profit get in the way of fundamental human rights…With high winter energy costs, the ongoing threat of the pandemic, and racial and economic justice issues surrounding energy debt, we urge FERC to use its existing statutory authority to better protect consumers from energy market manipulation. FERC should use existing statutory authority to provide more transparency on gas spot markets to protect consumers from companies that use hidden prices to set or manipulate energy costs on a non-competitive basis.”

Senator Gillibrand has consistently fought to ensure New Yorkers can afford their utilities. Last month, Gillibrand joined colleagues to urge the Department of Health and Human Services (HHS) to address the ongoing energy crisis and ensure families that rely on the Low Income Home Energy Assistance Program (LIHEAP) have the resources needed to stay safe throughout the winter. Previously, in October, she joined colleagues to ask HHS to distribute LIHEAP funding quickly and at the highest level possible. When millions of workers were laid off at the onset of the pandemic, Senator Gillibrand fought alongside her colleagues to deliver $900 million in LIHEAP funding in the CARES Act and an additional $4.5 billion in supplemental funding to the program as part of the American Rescue Plan. Gillibrand also successfully pushed the Trump administration to immediately release the emergency funding and send a vital lifeline to New Yorkers. 

The letter was signed by Senators Richard Blumenthal (D-Conn.), Dick Durbin (D-Ill.), Kirsten Gillibrand (D-N.Y.), Chris Murphy (D-Conn.), Jack Reed (D-R.I.), Bernie Sanders (I-Vt.), Chris Van Hollen (D-Md.), Elizabeth Warren (D-Mass.), Sheldon Whitehouse (D-R.I.), Ron Wyden (D-Ore.), and Representatives Alma Adams (NC-12), Cori Bush (MO-01), André Carson (IN-07), David N. Cicilline (RI-01), Yvette D. Clarke (NY-09), Bonnie Watson Coleman (NJ-12), Danny K. Davis (IL-07), Adriano Espaillat (NY-13), Dwight Evans (PA-03), Jesús G. “Chuy” García (IL-04), Jahana Hayes (CT-05), Pramila Jayapal (WA-07), Ro Khanna (CA-17), James R. Langevin (RI-02), Stephen Lynch (MA-08), Carolyn B. Maloney (NY-12), James P. McGovern (MA-02), Grace Meng (NY-06), Jerrold Nadler (NY-10), Eleanor Holmes Norton (DC), Alexandria Ocasio-Cortez (NY-14), Mark Pocan (WI-02), Ayanna Pressley (MA-07), Jamie Raskin (MD-08), Rashida Tlaib (MI-13), Ritchie Torres (NY-15), Nydia M. Velázquez (NY-07), and Peter Welch (VT).

The Center for Biological Diversity, Food & Water Watch, National Consumer Law Center, and Public Citizen endorsed this letter.

The full text of the letter can be found here or below: 

 

Dear Chairman Glick:

We write to express our concern in regard to the effect that anticipated increases in heating and energy costs will have on our constituents this winter. As the entity tasked with the regulatory mission of ensuring consumers can access reliable energy at a reasonable cost, the Federal Energy Regulatory Commission (FERC) has a significant role to play in promoting energy justice and protecting United States residents from unfairly high energy costs. Under its statutory authority, FERC has the power to influence retail rates for natural gas and electricity, including by preventing market manipulation in wholesale natural gas and electricity markets and enforcing gas spot market transparency. We urge the Commission to use its existing regulatory authority to ensure that households’ energy bills are not driven up by manipulation, obfuscation, or other malfeasance from regulated entities, and to work collaboratively with other agencies to address energy debt.

Disparate energy debt burdens are a serious economic, racial, and health justice issue. In December, the U.S. Energy Information Administration (EIA) predicted that some households’ winter heating bills may rise by as much as 39 percent, compared to last year—a spike that will most affect those with the fewest resources.  Nationally, low-income households face energy burdens that are three times higher on average than other households.  This is also a racial justice issue, with Black and Hispanic households having a median energy burden that is 43 percent and 20 percent higher than non-Hispanic white households, respectively.  The loss of utility service due to high energy burdens is one of the primary reasons for homelessness, especially for families with children.  Accordingly, during this pandemic, the loss of utility service and resulting homelessness directly led to higher COVID-19 death and infection rates among vulnerable populations. 

There are many overlapping factors leading to this rise in energy prices, including profiteering from oil and gas companies and high oil and gas exports. Additionally, as families across the country struggle to pay their utility bills, utility companies received significant federal support during the pandemic. Sixteen utilities received a combined $1.25 billion in financial support through the Coronavirus Aid, Relief, and Economic Security Act, and some utilities have seen soaring profit margins during the pandemic. NextEra Energy, for example, dedicated a combined $2.7 billion to CEO compensation and shareholder dividends between April 2020 and June 2021.  

For too long, the federal government has allowed too many utility companies to put profit above the public. We have a responsibility to ensure that everyone has access to safe living conditions, and we cannot let corporate greed or a quest for profit get in the way of fundamental human rights.

With high winter energy costs, the ongoing threat of the pandemic, and racial and economic justice issues surrounding energy debt, we urge FERC to use its existing statutory authority to better protect consumers from energy market manipulation. FERC should use existing statutory authority to provide more transparency on gas spot markets to protect consumers from companies that use hidden prices to set or manipulate energy costs on a non-competitive basis.  

Additionally, should prices increase this upcoming winter, FERC must closely monitor wholesale natural gas and electricity market activity to determine if any market participants are engaging in market manipulation or other violations. 

Lastly, we are encouraged to see FERC’s commitment to the creation of the Office of Public Participation and the appointment of Director Elin Katz to spearhead transparency and consumer participation in FERC proceedings. It is essential that FERC’s Office of Public Participation engage consumers around how FERC can protect vulnerable households in the long-term by establishing new policies that limit harm from market manipulation, non-competitive gas transactions, and other activities that put private profit above public access to affordable energy.

We also recognize that numerous agencies—including the Department of Health and Human Services and the Department of Energy—have a collaborative role to play in supporting energy consumers and promoting energy justice. Almost two years into the coronavirus pandemic, families are experiencing immensely burdensome levels of utility debt that are approximately 67 percent higher than in the average year.  Electric utilities carried out more than one million disconnections during the pandemic, directly threatening the health and well-being of millions of Americans.  And according to a recent Census Bureau survey, nearly 30 percent of respondents reported either minimizing or altogether foregoing other households expenses like food and rent to pay their energy bills in the last year.  In addition to using FERC’s standalone statutory authority, we encourage you to work as part of a whole-of-government response on this critical issue.

Thank you, and we look forward to working with you on this matter.