Energy Secretary Bill Richardson last week said long-awaitedClinton administration legislation to restructure the retail powerindustry would be on congressional lawmakers’ desks after theyreturn from Easter recess in mid-April.

The administration is in the midst of fine-tuning the measure soit “makes[s] more sense” from a policy standpoint, he said duringan electricity restructuring forum co-sponsored by The AtlanticMonthly and the Edison Electric Institute in Washington D.C. lastTuesday. But “it’ll be ready” when Congress comes back on April12th, he assured Rep. John Dingell, ranking Democrat on theCommerce Committee, and other top energy lawmakers and regulatorswho were panelists.

The bill is expected to have some bad news for the natural gasindustry: it will propose mandating the use of renewable fuels inelectricity generation at an annual level that will be a “littlehigher” than the 5.5% previously sought by the administration,Richardson noted. Some expect it to be 7% or more. The gas industryis fervently opposed to the mandate because it contends it wouldgive renewables – i.e. solar, wind and biomass – an unfaircompetitive advantage over gas as a source to generate power.”We’re willing to go to battle” over this issue, said one gassource, adding that nearly the entire industry was united againstthe mandate.

The higher level for renewables also is not expected to sit wellwith Senate Energy Committee Chairman Frank Murkowski (R-AK), whowas “critical” of 5.5%, a committee press aide told NGI. He justcan’t see how renewable fuels, which currently generate only aboutone-tenth of 1% of the electricity nationwide, can reach 7% or moreof generation capacity without including nuclear or hydro power inthe fuel category. “What are you going to do fill an entire statewith windmills?” the aide asked. Also, the senator doesn’t likemandates. “Any time you mandate something, it’s a big deal with thechairman.”

Even with the administration’s proposal expected soon, lawmakerssaid the outlook for getting comprehensive restructuringlegislation out of Congress this year would be iffy at best. “Idon’t think we can [get a comprehensive bill through] unless we’reprepared to address the tough issues,” including stranded-costrecovery, the fate of power marketing administrations, thegrandfathering of states’ retail access plans and the controversialrenewable mandate, said Murkowski. He indicated the prospect forsuch a bill this year was a “mixed bag.”

Sen. Jeff Bingaman (D-NM) agreed that a comprehensiverestructuring measure was out of the question this year, but hethinks legislation addressing a “very short list” of issues mightbe doable. “…[I]f we can get to a point very early in thisCongress to agree that we’re only going to be able to pass a veryshort list of provisions at the federal level, I think we can moveahead,” he told energy executives and lobbyists.

Rep. Joe Barton (R-TX), chairman of the energy and powersubcommittee, was a bit more optimistic and had a clear-cuttimetable for passage of restructuring legislation. He hopes to domarkup by either “this spring or early summer,” and forward a billto the floor by “late summer or early fall.” Barton said his goalwas to be at a “Rose Garden [signing] ceremony” for electricityrestructuring legislation “before the first presidential primary inthe year 2000.” But he conceded that reaching that goal hinged onthe contents of the administration’s bill and whether the House andSenate could reach consensus on key issues.

Industry analysts generally agree the chances for a powerrestructuring bill grow increasingly dim as the beginning of thepresidential primary draws near next year.

Richardson said that not only was there a need for federallegislation, but that the states were clamoring for it. The “stateswant us to do this…What we would be doing would be helping thestates achieve some very good results for their customers.” Theadministration estimates its bill would save retail power consumers$20 billion annually. Dingell countered that he hadn’t heard anystate regulators asking “the feds” to step into their retailmarkets.

Murkowski said he was concerned a federal restructuring billwould increase power costs for rural consumers, who are prevalentin his home state. “If the rates are going to go up for RuralAmerica, look out. The bill isn’t going to go anywhere,” he warned.But Richardson noted there were “a lot of provisions” in theadministration’s bill to protect rural customers and others. Hecited the section that would permit states to opt out of federalrestructuring as an example.

Richardson pointed to last summer’s price spikes in the Midwestpower market as a good reason “why we need a federal bill” tocomplement states’ efforts. “We’re not going to have utilitiesbuild new [generation] capacity unless they know what the new rulesare going to be.”

FERC Chairman James Hoecker said he was “guardedly optimistic”that there wouldn’t be a recurrence of power price spikes in theMidwest. “I don’t think you’re going to find that this summer. Ithink there is more generation on line in the Midwest” than lastyear.

Susan Parker

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