Alliance Lobbies Congress, Bush for Electric Reliability

The Alliance for Competitive Electricity last week called on Congress and the Bush Administration to address serious electric infrastructure deficiencies that it claims threaten adequate supplies of reasonably-priced electricity throughout the nation. The 11-member group currently reads like a list of who's who in the power industry.

Alliance released a 12-page blueprint that it believes can help guide Congress and the administration in addressing these deficiencies. Among other things, the blueprint advocates incentives needed to upgrade a decaying infrastructure that threatens the reliable supply of reasonably-priced electricity. It calls for ensuring that the national transmission system operates as seamlessly as possible by expanding open-access requirements and easing restrictions that now block participation in Regional Transmission Organizations (RTO).

"The federal government can help make needed repairs and ensure the improved efficiency and reliability of the nation's wholesale electricity markets by creating a clear framework for a more efficient electric industry," said former Sen. J. Bennett Johnston, an advisor to the Alliance who helped write the last major piece of federal energy legislation, the Energy Policy Act of 1992.

The blueprint, entitled "Meeting Our Nation's Needs for Adequate Supplies of Reliable and Reasonably Priced Electric Power," graphically illustrates the growing disparity between the peak demand for electric power throughout the U.S. and the declining investment in new transmission lines, the group said.

"Without adequate transmission capacity to meet growing demand, reliability will be compromised, prices will increase, overall system efficiency will decline and the benefits of wholesale generation competition will not be realized," Johnston said.

The blueprint urges Congress to:

  • Extend the wholesale transmission open access policies of the Federal Energy Regulatory Commission (FERC) to currently non-FERC jurisdictional transmission owners, including municipal and cooperative utilities, the Tennessee Valley Authority and the Power Marketing Administrations;
  • Clarify state and federal jurisdictional ambiguity that leaves transmission owners uncertain who will regulate them and under what terms;
  • Establish a regulatory regime governing the transmission system that ensures open, non-discriminatory access, while providing the incentives necessary to upgrade and expand that system;
  • Amend the federal tax code to allow the tax-free restructuring of transmission ownership and to allow municipal and cooperative utilities to participate in competitive wholesale and retail markets, without imperiling their existing tax and financial status;
  • Remove federal barriers that stand in the way of a more competitive industry, including the Public Utility Holding Company Act of 1935 (PUHCA) and section 210 of the Public Utility Regulatory Policies Act of 1978 (PURPA);
  • and Establish an enforceable code of conduct to ensure the reliability of the interstate transmission system.

To view a copy of the blueprint, visit the Alliance's Web site at http://www.afce.org.

Currently, Alliance members include Detroit Edison, GPU, Dominion, National Grid USA, Duke Energy, Public Service Company of New Mexico, Energy East, Public Service Electric and Gas, Entergy, Xcel Energy and Exelon Corp.

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