The U.S. Senate is closing in on a set schedule of hearings forall pending federal electric deregulation proposals, Senate EnergyCommittee Chairman Frank Murkowski (R-AK) said at a committeehearing Wednesday. The schedule will include a hearing date for theDept. of Energy Secretary Bill Richardson’s administrationproposal, allowing interested parties to comment on itscontroversial 7.5% renewable energy mandate.

Murkowski named the renewable mandate as one of his main concernsin the administration’s bill. “[The mandate] will cost consumersbillions of dollars in higher electric rates and is not physicallyachievable,” the Senator said. He also disapproved of the inclusion ofa federal date-certain mandate on the states as well as other programsthat, in Murkowski’s view, have nothing to do with deregulation. Heasked for all witnesses who testify at the upcoming hearings toaddress these concerns. Murkowski voiced these doubts just days aftera House Commerce subcommittee hearing on power restructuring revealedthat House lawmakers are battling over main power deregulation issuesas well (See Daily GPI, May 21).

On the positive side, Murkowski said he approved of certainissues in the bill, including: repeals for PUHCA (Public UtilitiesHolding Company Act) and PURPA (Public Utility Regulatory PoliciesAct), the bill’s suggestions on what to do with federal powermarketing administrations and the Tennessee Valley Authority, itsallowance of open access on all wholesale transmission and its planto deal with the high cost of electricity in rural communities.

With all the pluses and minuses associated with powerrestructuring issues, Murkowski warned the administration thatcompromise is key. “I must say that if the administration threatensto veto any bill that does not include their pet provisions thatare unacceptable, it will be the administration, not Congress, thatis costing U.S. consumers the benefits of competition.”

The commencement of hearings could not happen soon enough,according to Chrisman Iribe, COO of USGen, PG&E’s competitivegeneration unit, and president of the Electric Power SupplyAssociation (EPSA). Iribe testified at Wednesday’s hearing thatelectric deregulation has progressed inconsistently, leading toreliability problems and prohibiting the retail market fromdeveloping. “In short, the lack of a national policy on retailcompetition has contributed significantly to the uncertainty of thewholesale market. This uncertainty, in turn, has prevented anorderly and market-responsive infrastructure investment ingeneration and transmission.The correlation between retailcompetition and wholesale competition is very strong-you can’t haveone without the other.”

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