The Senate last week scaled back proposals in its omnibus energy bill that sought to expand the authority of the Federal Energy Regulatory Commission to review energy mergers, remedy “unjust” electricity rates, award market-based rate authority and order the construction of transmission facilities.

The package of amendments, which were offered by Sen. Craig Thomas (R-WY) on behalf of himself and other senators, were adopted by a voice vote last Wednesday, evoking little debate on the Senate floor. The measures reflected Thomas’ belief that the states, not federal regulators, should steer restructuring of retail energy markets.

A key amendment short-circuited the bill’s attempt to extend FERC merger-review authority to include deals involving natural gas production and transportation facilities, and state-jurisdictional energy assets. Specifically, it limited Commission review to mergers involving holding companies, generation in interstate commerce, and gas company acquisitions of electric assets. In addition, it raised the threshold for FERC review of energy asset sales to $10 million from $1 million. Thomas’ measure also established procedures for expedited action on merger applications.

Another initiative restricted the action FERC can take to remedy unjust electricity rates. The energy bill had sought to broaden the agency’s authority in this area, to include ordering divestiture of facilities and mandatory participation in regional transmission organizations (RTO) for violators. But Thomas limited the Commission’s action solely to fixing unjust rates.

His initiative further reduced the number of criteria that the Commission can consider when awarding or revoking market-based rates to three, instead of the six proposed in the broad energy bill.

Thomas also headed off efforts to provide the Commission an open-ended period in which to establish an “effective date” for refunds on electricity sales. Under such a provision, Thomas argued refunds might never go into effect. His amendment endorsed the status quo of a five-month window for FERC to establish a refund effective date.

Other Thomas amendments adopted by the Senate:

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