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Senate Panel Clears Electricity, Coal Titles; Gas & Oil On Tap

The U.S. Senate Energy and Natural Resources Committee last week signed off on a number of titles as part of broader comprehensive energy legislation, including electricity and coal titles. The panel is set to reconvene this week to consider an oil and gas title.

Among other things, the electricity title sets forth a new mandatory rules framework to ensure greater reliability of the transmission grid. As things currently stand, compliance with reliability standards by power entities is voluntary. Under the reliability section of the title, an electricity reliability organization (ERO), approved by FERC, will have the power to establish mandatory rules for operation of the transmission grid and authority to penalize anyone who violates those standards.

The title also would provide limited federal backstop siting authority for electric transmission lines in areas designated by the Secretary of Energy as national interest transmission corridors. FERC could issue siting permits if a state withholds approval inappropriately. The measure also would provide FERC with eminent domain authority for electric transmission infrastructure.

The regional transmission organization (RTO) section of the title promotes voluntary RTO formation and prohibits FERC from mandating or conditioning RTO participation. The title requires transmission organizations, such as RTOs, to justify their costs and expenditures.

Under the title, FERC's proposed rulemaking on standard market design would be terminated, while the native load section is designed to ensure that utilities with service obligations have transmission access to serve their customers.

Sen. Pete Domenici (R-NM), chairman of the committee, noted on Thursday that he has not been able to agree with Sen. Jeff Bingaman (D-NM), the panel's ranking minority member, on language to repeal the Public Utility Holding Company Act (PUHCA). The version of comprehensive energy legislation passed by the U.S. House of Representatives includes a PUHCA repeal section.

"I believe that this is an extremely important part of any electricity package and I'm going to continue to work with Senator Bingaman to try to reach a compromise on the merger language that he feels must be included," Domenici said. "I'm hopeful that we may be able to come to agreement on language early [this] week."

The committee approved a total of nine amendments for the electricity title. On a voice vote, the panel approved an amendment declaring that FERC has exclusive jurisdiction to determine whether termination payments required under contracts entered into prior to 2001 and since found to be fraudulent must be paid.

That amendment was sponsored Sen. Maria Cantwell (D-WA). Following the voice vote, Domenici and Cantwell expressed their intent to continue working on the language of the amendment to address concerns expressed by some senators.

The committee also adopted by voice vote a coal title. Among other things, the approved title promotes development of efficient, environmentally sound, coal-based technologies, primarily integrated gas combined cycle (IGCC), which is getting a closer look from utilities such as American Electric Power (AEP).

Meanwhile, the committee this week is set to take up consideration of an oil and gas title as it works to advance comprehensive energy legislation. The title's language was due be released by 10:00 p.m. Friday evening and will be posted on the committee's website (http://energy.senate.gov/public/).

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