Utility commissions begin to assess ratepayer effects of the Russian invasion

Introduction

U.S. governors and utility commissioners were quick to denounce the Russian invasion of Ukraine. While comments from governors discussed how the conflict could impact their states' energy positions, comments from state utility commissioners and energy officers have showcased how state-level agencies can show political sensitivity while also looking after ratepayers.

Energy costs

As energy prices and inflation spike, while interest rates rise, there is a likelihood that rate case activity may surge, resulting in increased rates. Utility regulators have called attention to various options that may help ratepayers mitigate these costs.

New York Public Service Commission Chairman Rory Christian, a Democrat, issued a statement March 4 highlighting certain programs and options ratepayers may utilize to help combat rising utility bills that resulted from the increased cost of natural gas, heating oil and propane.

The New York PSC issued letters to the major electric and gas utilities operating in the state, calling on improving communications with their customers. In response to the commission's directive, the utilities will continue to promote a range of programs that offer flexible payment terms and discounts, such as deferred payment agreements, payment extensions, level payment plans and Energy Affordability Program discounts for low-income customers.

New York Gov. Kathy Hochul, a Democrat, announced an initiative, led by the Department of Public Service and Office of Temporary and Disability Assistance, to bring awareness of the various assistance programs available to ratepayers.

Energy independence

Similar to the sentiments issued by the nation's governors, a few state utility commissions highlighted the importance of energy independence. Still unknown is how such calls for increased U.S. drilling and pipeline projects will fare in the context of renewable energy initiatives and the environmental and social hurdles faced by the fossil-fuel industry.

During its March 15 meeting, the Republican-majority Georgia Public Service Commission issued a resolution stating that the "invasion's impact on energy prices has confirmed again that the United States must reduce or eliminate its reliance on foreign energy sources and must institute a policy of energy independence." Additionally, the commissioner called on the federal government to continue its support of Ukraine while partnering up with individual state utility agencies to bolster the country's natural resources.

In a March 4 letter sent to President Biden, Railroad Commission of Texas Chairman Wayne Christian, a Republican, said that in addition to ending all Russian oil imports, the president should "demand international oil and gas companies do the same and fulfill that supply gap with American and Texan made oil and gas." The Railroad Commission of Texas is the state's regulatory body overseeing gas utilities. Christian noted several actions that the Biden administration may take to ensure energy relief, such as approving the Keystone XL pipeline, removing all exporting restrictions on liquified natural gas, renewing oil and gas leasing of federal lands and waters, and cutting off all Russian oil imports.

Biden announced March 8 that the U.S. is banning all imports of Russian oil, gas and other energy, allowing companies to withdraw from existing contracts within 45 days. The policy also prohibits new U.S. investment in Russia's energy sector.

On March 3, Hawaii's Chief Energy Officer Scott Glenn issued a statement in support of Par Pacific Holdings Inc.'s decision to suspend purchasing any more Russian crude oil for Hawaii. Glenn further stated that "[w]hile we do not anticipate any supply concerns, [Hawaii State Energy Office] reminds residents that energy prices are likely to remain high and perhaps go even higher due to uncertainty in the global energy markets. This market exposure underscores why Hawaii is focused on transitioning as quickly as it can to locally produced renewable energy." Hawaii is one of the many states with a 100% renewable portfolio standard.

Actions taken by Miss. utility regulators

Mississippi Public Service Commission regulator Brandon Presley, a Democrat, issued a request during the commission's March 1 meeting, calling on the state's regulated public utilities, including energy companies, to report whether they or their parent company are doing business of any kind with Russian ventures, and what their plan is to sever those ties immediately.

"It's incumbent upon regulated utilities that have a monopoly status to make these types of determinations and come back and report those to us," said Presley. Chairman Dane Maxwell also noted that he is aware of some companies that purchase nuclear fuel from Russia and expects to hear from those on the changes.

The PSC unanimously approved the request, which asked the utility to prepare individual confidential briefings of their findings and plans to the commission staff by March 8.

That same day, the Republican chairman released a statement that he would meet with colleagues to discuss how best to adequately protect Mississippians from outside cyberattacks on the state's critical infrastructure.

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