Electric Bill Dies; Senate Settles for Reliability
Unable to end a stalemate over two key issues, Republican and Democrat
leaders of the Senate Energy and Natural Resources Committee sent up a
white flag last week, conceding defeat in their struggle to pass comprehensive
electric restructuring legislation this year.
But to show that their efforts weren't entirely in vain, they voted
out a stripped-down reliability bill, which supporters say could provide
real relief to the bulk power market as early as this summer. Critics,
however, contend it's nothing more than a token measure.
Chairman Frank Murkowski (R-AK), who has spearheaded the drive in the
Senate for comprehensive legislation, said that while he was "very
reluctant" to defer action until next year, the difference of opinions
on the two issues - extending FERC jurisdiction to include transmission
bundled with retail sales and a federal mandate on the use of renewable
fuels in generation - forced his hand. The two deal-breaker issues were
excluded from a discussion draft of comprehensive legislation that was
circulated to committee members in mid-June.
Sen. Jeff Bingaman of New Mexico, the ranking Democrat on the committee,
"could not support the draft [legislation] without a favorable resolution
of those issues, and I simply could not support the draft if they were
included," Murkowski said during a business meeting of the full committee
If Commission jurisdiction over transmission were to be expanded, the
chairman said he feared that an already "aggressive FERC" would
"retreat from its history of deference to states in the regulation
of bundled retail sales, including transmission." And while he characterized
himself as "one of the strongest supporters.....of renewable energy,"
he noted "I'm also very realistic about renewable energy and how much
it can contribute" to the nation's overall energy mix. "We've
spent about $17 billion on renewables, yet we've only achieved less than
2% [of the energy mix] if you exclude hydro." This level of spending,
he believes, is impractical given that "we're facing an energy train
In light of their differences, the chairman said he and Bingaman agreed
the "best approach" was to adopt a reliability bill, sponsored
by Sen. Slade Gorton (R-WA). The measure gives FERC authority to begin
the process of creating one national electric reliability organization,
as well as immediate power to adopt reliability standards for the bulk
power system. Also, compliance with standards, which heretofore has been
voluntary, would become mandatory under S. 2071, and transgressors would
be penalized. "...I believe we may [be forced to] revisit this issue
on an emergency basis as the pinch and crunch of the current energy crisis
is felt," Murkowski said.
"Not only does this bill provide a long-term solution to electricity
reliability, it will give FERC the immediate authority to help prevent
blackouts. And I hope it will send a signal to any parties that might be
tempted to 'game' the transmission system and hurt reliability that they
are being watched," Gordon said in a prepared statement.
"I hope that we can cause our leadership to get this [bill] through
the Senate and through Congress this year," noted Sen. Larry Craig
(R-ID). If that should happen, Murkowski cautioned the Gorton measure should
not be considered a substitute for a comprehensive electric bill. "...I
do want to make sure that everybody understands that we [will] not abandon
Despite last Wednesday's Senate action, some in the power industry still
aren't ready to give up on the prospect of a comprehensive electric bill
being passed by Congress this year. They believe it could happen if the
House continues with its "comprehensive approach" to electric
restructuring, and the Senate reliability measure is inserted in the House
bill during conference.
"A lot of grand slams get hit in the ninth inning of a ballgame,"
remarked a spokesman for the Electric Power Supply Association. Last week
two groups, the Electricity Restructuring Stakeholders and leading marketers
and utilities pushing deregulation, threw their support behind House Commerce
Committee Chairman Thomas Bliley, (R-VA) and his draft legislation, promising
to work with him on refinements. Bliley had been criticized for issuing
the comprehensive draft under an all-or-nothing label (see NGI,