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Murkowski Outlines Senate's Electric Deregulation Agenda

Murkowski Outlines Senate's Electric Deregulation Agenda

The U.S. Senate is closing in on a set schedule of hearings for all pending federal electric deregulation proposals, Senate Energy Committee Chairman Frank Murkowski (R-AK) said at a committee hearing Wednesday. The schedule will include a hearing date for the Dept. of Energy Secretary Bill Richardson's administration proposal, allowing interested parties to comment on its controversial 7.5% renewable energy mandate.

Murkowski named the renewable mandate as one of his main concerns in the administration's bill. "[The mandate] will cost consumers billions of dollars in higher electric rates and is not physically achievable," the Senator said. He also disapproved of the inclusion of a federal date-certain mandate on the states as well as other programs that, in Murkowski's view, have nothing to do with deregulation. He asked for all witnesses who testify at the upcoming hearings to address these concerns. Murkowski voiced these doubts just days after a House Commerce subcommittee hearing on power restructuring revealed that House lawmakers are battling over main power deregulation issues as well (See Daily GPI, May 21).

On the positive side, Murkowski said he approved of certain issues in the bill, including: repeals for PUHCA (Public Utilities Holding Company Act) and PURPA (Public Utility Regulatory Policies Act), the bill's suggestions on what to do with federal power marketing administrations and the Tennessee Valley Authority, its allowance of open access on all wholesale transmission and its plan to deal with the high cost of electricity in rural communities.

With all the pluses and minuses associated with power restructuring issues, Murkowski warned the administration that compromise is key. "I must say that if the administration threatens to veto any bill that does not include their pet provisions that are unacceptable, it will be the administration, not Congress, that is costing U.S. consumers the benefits of competition."

The commencement of hearings could not happen soon enough, according to Chrisman Iribe, COO of USGen, PG&E's competitive generation unit, and president of the Electric Power Supply Association (EPSA). Iribe testified at Wednesday's hearing that electric deregulation has progressed inconsistently, leading to reliability problems and prohibiting the retail market from developing. "In short, the lack of a national policy on retail competition has contributed significantly to the uncertainty of the wholesale market. This uncertainty, in turn, has prevented an orderly and market-responsive infrastructure investment in generation and transmission.The correlation between retail competition and wholesale competition is very strong-you can't have one without the other."

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