Murkowski Previews Electric Restructuring Bill
Senate Energy Committee Chairman Frank Murkowski (R-AK) unveiled
a draft electricity restructuring proposal last week that couldn't
be more friendly to natural gas had the industry itself written the
Foremost, the draft --- unlike the Clinton administration's
proposal --- doesn't include a federal mandate requiring the use
of renewable fuels in power generation. A renewable mandate also is
noticeably absent from the House restructuring bill, which is
before the Energy and Power Subcommittee.
The mandate was omitted because the federal government
"shouldn't pick [the] winners and losers" in the energy markets,
Murkowski told lawmakers and energy executives last Thursday at the
1999 National Summit on Electricity and Natural Gas in Washington,
The committee chairman outlined for the first time the key
principles he believes should be included in a bill. He said he
plans to hold hearings on his draft when Congress convenes next
year. And he will only formally introduce legislation reflecting
his principles if there's a "reasonable chance of forming [a]
consensus" in the committee.
In addition to natural gas, Murkowski was particularly kind to
the states in the draft proposal. It precluded federal preemption
of state restructuring programs, as well as a date-certain for
states to comply with federal restructuring legislation. Further,
the draft drew a clear division between the jurisdiction of the
federal government and the states, giving states responsibility
over all retail sales within their borders and FERC sole
jurisdiction over the interstate market, including wholesale power
Moreover, it clarified that states have the authority: 1) to
protect electric consumers in their states; 2) impose a "wires"
charge to fund state public purpose programs; 3) to establish
reciprocity requirements; and 4) over retail sales of electricity
to federal facilities.
Probably the most "controversial" provision would give utilities
the right to assert eminent domain when building new transmission
facilities, Murkowski said. But this can only be done when the new
facilities are "proposed in accordance to a regional planning
process, and the line cannot be built through the state process."
Hydroelectric facilities and gas pipelines already possess the
right to federal eminent domain, Murkowski noted, and he thinks it
time power transmission had it.
Furthermore, the draft would give FERC jurisdiction over all
interstate transmission lines, not just those owned by
investor-owned utilities. And it supports voluntary participation
by utilities in regional transmission organization (RTOs), and
would set standards for the Commission to follow in creating such
Murkowski noted the Senate Finance Committee will address at an
Oct. 19th hearing the issue of whether municipally owned utilities
should be allowed to continue to issue tax-exempt bonds to build
new facilities, when investor-owned utilities can't. "The question
is [is] that fair competition," Murkowski asked, and added that he
didn't think so.
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