Clinton Power Bill to Have Bad News for Gas
Energy Secretary Bill Richardson yesterday said the long-awaited
Clinton administration bill to restructure the retail power
industry would be on congressional lawmakers' desks after they
return from Easter recess in mid-April.
The administration is in the midst of fine-tuning the measure so
that it "make[s] more sense" from a policy standpoint, he said
during an electricity restructuring forum sponsored by The Atlantic
Monthly in Washington D.C. When Congress comes back on April 12th,
"it'll be ready," he assured Rep. John Dingell, ranking Democrat on
the Commerce Committee, and other top energy lawmakers and
The bill will have some bad news for the natural gas industry in
that it proposes to mandate the use of renewable fuels in electric
generation at an annual level that will be a "little higher" than
the 5.5% previously sought by the administration, Richardson noted.
Some expect it to be 7% or higher. The gas industry is fervently
opposed to the mandate because it contends it would give renewables
a leg up over natural gas in the generation market. "We're willing
to go to battle" over this issue, said one source, adding that
nearly the entire industry was united against the mandate.
Lawmakers said the outlook for restructuring legislation out of
Congress this year appears iffy at best. "I don't think we can [get
a comprehensive bill through] unless we're prepared to address the
tough issues," including stranded-cost recovery, power marketing
administrations, the grandfathering of states' retail access plans
and the renewable mandate, said Senate Energy Committee Chairman
Frank Murkowski (R-AK). He indicated the prospect for such a bill
this year was a "mixed bag."
Sen. Jeff Bingaman (D-NM) said a comprehensive restructuring
measure was out of the question this year, but he thinks
legislation addressing a "very short list" of issues might be
doable. "...[I]f we can get to a point very early in this Congress
to agree that we're only going to be able to pass a very short list
of provisions at the federal level, I think we can do that," he
told energy executives and lobbyists.
Rep. Joe Barton (R-TX), chairman of the energy and power
subcommittee, was a bit more optimistic and had a clear-cut
timetable for passage of restructuring legislation. He hopes to do
markup by either "some time this spring or early summer," and
forward a bill to the floor by "late summer or early fall." He
conceded, however, there was "no absolute necessity" to move a bill
now, but he added "if we can get consensus, there is no reason not
to move a bill." Barton said his goal was to be at a "Rose Garden
[signing] ceremony" for electricity restructuring legislation
"before the first presidential primary in the year 2000."
Industry analysts generally agree the chances for a power
restructuring bill grow increasingly dim as the beginning of the
presidential primary draws near next year.
Richardson said that not only was there a need for federal
legislation, but that the states were clamoring for it. The "states
want us to do this...What we would be doing would be helping the
states achieve some very good results for their customers." The
administration estimates its bill would save retail power consumers
$20 billion annually. Dingell countered that he hadn't heard any
state regulators asking "the feds" to step into their retail
Murkowski said he was concerned a federal restructuring bill
would increase power costs for rural consumers, particularly in his
home state. But Richardson noted there were "a lot of provisions"
in the administration's bill, including one that would allow states
to opt out of the federal proposal that would protect rural
customers and others.
Richardson cited the price spikes seen in the Midwest power
market last summer as a good example of "why we need a federal
bill" to complement states' efforts. "We're not going to have
utilities build new [generation] capacity unless they know what the
new rules are going to be," he said.
FERC Chairman James Hoecker said he was "guardedly optimistic"
that there wouldn't be a recurrence of power price spikes in the
Midwest. "I don't think you're going to find that this summer. I
think there is more generation on line in the Midwest" than last