Murkowski: FERC Should Punish Utilities that Steal Power
Senate Energy Chairman Frank Murkowski last week took another
shot at what's fast becoming his favorite target --- FERC. He
chided the Commission for failing to take punitive action against
electric utilities that "improperly" took power from the grid last
summer, which lead to near-blackout situations in the Midwest.
"I think they should [have].....assessed some kind of
appropriate fine or whatever other authority that they felt was
necessary, but to just say 'shame on you' I don't think is adequate
or reasonable," the Alaskan Republican said following a speech to
the annual meeting of the United States Energy Association in
"If they [FERC] haven't got the teeth to enforce it, they should
ask Congress for the legislative authority" to do so," he told
reporters. "I think they had the capability to enforce it [last
summer], but they didn't do it."
Murkowski emphasized the ball's in the Commission's court. "It's
not up to us [Congress] to figure out all the cures.....They [FERC]
spend all their time on this area and they know" what's needed to
ensure grid reliability this summer.
The threat of brownouts and blackouts this summer is "very
real," Murkowski said. "I'm told that yesterday [last Tuesday] we
were near a blackout situation in one area [where] we had prices
peaking at about $6,000."
As for electricity restructuring, he noted Senate Republicans
got together last week for a "skull session" on the various bills -
four are comprehensive and four are "narrower in scope" focusing
mostly on reliability. "Surprisingly enough, [we found] there's
quite a bit of agreement on many issues. That's the good news.
[But] trying to tie these all in" is going to be a "big job," he
Murkowski plans to begin marking up an electricity restructuring
measure this Wednesday. "Some people say we should have done it
last year, some people suggest that we should wait for a new
administration, but I'm committed to go through this process and
see what we got." Furthermore, "some [say] why don't you just
concentrate on reliability. I wouldn't exclude that, but that's not
my objective. My objective is to start in with comprehensive and
see where we go."
Murkowski also criticized FERC again for "dragging [its] feet"
with respect to approving the proposed Independence Pipeline to the
Northeast. He believes the natural gas pipeline, which would bring
Canadian gas supplies from the Midwest to the Northeast, would
provide "some relief" to Northeast customers who largely depend on
FERC's "got an obligation in their ruling [on Independence] to
address the economic feasibility [of the project]. They're not
supposed to give anything away, but if an area of the country needs
an alternative [fuel] source, I think they should make every effort
to try and make sure the economics fit," he said.
The reverberations of the Commission's decision on Independence
will be felt this summer, he warned. "Wait until they feel the
impact this year when the air conditioners go on in the Northeast,
and those power generating plants that depend on oil have to pay
two to three times what they paid this year. That's going to affect
Murkowski further noted Senate Majority Leader Trent Lott (R-MS)
intends to introduce this week the "National Energy Security Act of
2000," which will include a mix of energy proposals aimed at
reducing U.S. dependence on oil imports by 50% by 2010.
The proposals will seek to promote the use of natural gas by
removing existing disincentives, open up the Arctic Coastal Plain
area to energy development, open up the Overthrust region in the
Midwest to development, provide royalty relief for exploration in
frontier areas, offer tax incentives to marginal well producers,
establish a home heating fuel reserve in the Northeast, extend tax
credits for electricity produced from biomass and solar sources,
offer incentives for clean coal technology, expand and improve the
weatherization program for low-income families, oppose any
withdrawals from the Strategic Petroleum Reserve unless authorized
by the Secretary of the Department of Energy (DOE), as well as a
number of other measures.
Furthermore, the energy measure will require the DOE Secretary
to closely review the National Petroleum Council's report on
natural gas, Murkowski said. "It says you're not going to get there
[a 30 Tcf market] from here the way you're going. The
infrastructure costs [are going to be] a billion and a half
dollars. If you think you're going to get cheap gas, you've got
another thing coming."