Producers Like Largent-Markey Electric Bill, Hate Mandate
Although the much-touted electricity restructuring bill
introduced by Reps. Steve Largent (R-OK) and Edward Markey (D-MA)
would slash the renewable portfolio mandate proposed by the Clinton
administration by more than half, natural gas producers still
aren't quite satisfied.
While major producers "would certainly endorse" the overall
bipartisan Largent-Markey package, they remain opposed to any kind
of mandate that would give one fuel an advantage over another - no
matter how low the percentage, said John Sharp, NGSA's vice
president of federal and state affairs and counsel.
The legislation calls for the Energy Information Administration
(EIA) to assess the non-hydroelectric renewables' share of the
power generation market in January 2005. If it's lower than 3%,
then the bill would require the agency to set a standard of at
least 3% of total generation for renewables - wind, solar, biomass
or geothermal. This compares to the Clinton proposal that would
boost the renewables' market share, on a phased-in basis, to 7.5%
in 2015. Both the Largent-Markey bill and the administration
proposal would have the renewable mandate sunset in 2015.
Sharp noted the Largent-Markey renewable provision is a "mandate
doing nothing," given that renewables' share of the power
generation market currently is about 3%. Still, NGSA opposes it
simply because it is a mandate.
"I don't think we need to talk about renewables" in electricity
restructuring legislation at all, said Sharp. "There's no need to
mandate a ceiling or a floor for any fuel. I don't think Congress
should be in the business of dictating what kind of fuel to use,"
he told NGI. Even if lawmakers were proposing a mandate for natural
gas, "we'd probably oppose it - believe it or not."
And he thinks many key energy lawmakers share this view. "Based
on what I heard from congressmen at [a recent] hearing, I think a
renewable portfolio mandate is going to have a very difficult time
staying in the bill. My sense is that the majority of people on the
[House] Energy and Power Subcommittee do not endorse a fuel
But apart from the mandate provision, Sharp - like many others,
including Energy Secretary Bill Richardson - had high praise for
the Largent-Markey bill. "I think it's a bill that would easily be
the markup bill for the Energy and Power Subcommittee. This
initiative is reflective of a great deal of consensus."
Martin Edwards of the Interstate Natural Gas Association of
America (INGAA) said he wouldn't go as far as to call the
legislaiton a markup bill, but "I think it should be taken
seriously." He believes there's a lot to like about it. "I think in
general it's good to have a bipartisan bill of that nature out
there in the public forum. It builds on a lot of what the
administration has [proposed]."
Sharp particularly liked the provision that would grandfather
states, which enact retail-choice legislation by January 2001, from
federal restructuring legislation. He believes the provision is an
essential ingredient to restructuring. The Clinton administration
measure doesn't include a grandfathering provision.
The Largent-Markey bill would require regulated and
non-regulated utilities to offer retail choice to consumers by Jan.
1, 2002 - one year sooner than what's called for in the
administration's bill. However, it would allow states and
non-regulated utilities to "opt out" if they find, after notice
and hearing, that retail competition will have a "negative impact
upon a class of customers that cannot reasonably be mitigated."
Other key provisions in the bill would: give FERC authority to
oversee the creation of regional transmission organizations; award
states authority over stranded-cost recovery; give FERC authority
to approve and form a reliability group; exempt holding companies
from the Public Utility Holding Company Act, with the exception of
those serving two or more states that are closed to retail
competition; repeal the Public Utility Regulatory Policies Act;
place the Tennessee Valley Authority's transmission under
Commission jurisdiction; subject the Bonneville Power
Administration to FERC authority; provide for retail reciprocity
between states; and offer consumers protection against "slamming"
and other illegal acts. Many of the provisions are similar to those
proposed by the Clinton administration.