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Energy Bill to Address FERC Siting Authority, OCS Drilling

Sen. Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Committee, said last Thursday the panel plans to mark up energy legislation later this month that would give the Federal Energy Regulatory Commission greater authority over the siting of electric transmission facilities.

"We need to have more... authority at the federal [level] to move us to a national grid," Bingaman told reporters during an energy podium sponsored by Platts in Washington, DC. States, which currently have the authority to site transmission projects, are resistant to the effort. "I think it's going to be a heavy lift," Bingaman said.

"I think it's certainly [going to be] more than just expanding [FERC's] backstop authority." This authority, which FERC received in the Energy Policy Act of 2005, allows the federal regulator to take over when a state commission has "withheld approval" of a permit application for a transmission project for more than one year after it was filed.

Bingaman noted that FERC's exclusive authority to site and approve natural gas pipelines under the Natural Gas Act is "much more efficacious" than its limited authority with respect to transmission facilities..

Senate Majority Leader Harry Reid (D-NV) introduced legislation last Thursday that would give FERC the authority to site and permit transmission projects that deliver electricity produced from renewable fuels. To qualify for federal siting authority, a transmission project would have to make at least 75% of its capacity available to renewable generation. Bingaman said he plans to incorporate Reid's measure into the broader energy bill to be marked up the last week of March, CQ Today reported.

Bingaman said the energy legislation also would address offshore oil and natural gas development. First, the committee wants to hear from Interior Secretary Ken Salazar about the administration's "views as to whether any changes in statute are required and what their plan is to consider additional drilling offshore." Currently "there are no legal impediments to drilling the Outer Continental Shelf on the East Coast and West Coast. The only real impediments that continue are in the eastern Gulf of Mexico."

In addition, Bingaman said he hopes to add language on a national renewable energy standard (RES) in the bill, which would require power generators to produce a certain amount of electricity using renewable fuels. "I don't think it's inappropriate to have a federal standard." If the RES were set at 20%, he said 15% would be achieved through the production of electricity from renewable fuels, and the remaining 5% would satisfied via efficiency measures.

At a hearing last week Sen. Lisa Murkowski of Alaska, the ranking Republican on the Senate energy panel, said it didn't make sense to impose a "one-size-fits-all" renewable mandate when the transmission system is constrained. "In order for an RES to work, it must make the connection with transmission. We can't force utilities to meet a 20% requirement if they lack access to renewable energy at any prices."

She also said she also was concerned about how a national RES would affect different regions of the county -- particularly the Southeast -- that lack an abundance of "qualifying" renewable resources.

"We will try to craft legislation...that moves us to more use of renewable energy," but which is "not onerous" to the various regions in the country, Bingaman said.

The stand-alone bill would address a number of other areas: energy efficiency, building efficiency, energy appliance standards, clean coal technology, an adjustment to the loan guarantee program to assist renewable energy projects, as well as improved federal oversight of energy trading, according to Bingaman.

"I would like to see us enact cap and trade as well as energy legislation," but "it's not as ready for prime time in my opinion," he said.

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