Although the much-touted electricity restructuring billintroduced by Reps. Steve Largent (R-OK) and Edward Markey (D-MA)would slash the renewable portfolio mandate proposed by the Clintonadministration by more than half, natural gas producers stillaren’t quite satisfied.

While major producers “would certainly endorse” the overallbipartisan Largent-Markey package, they remain opposed to any kindof mandate that would give one fuel an advantage over another – nomatter how low the percentage, said John Sharp, NGSA’s vicepresident of federal and state affairs and counsel.

The legislation calls for the Energy Information Administration(EIA) to assess the non-hydroelectric renewables’ share of thepower generation market in January 2005. If it’s lower than 3%,then the bill would require the agency to set a standard of atleast 3% of total generation for renewables – wind, solar, biomassor geothermal. This compares to the Clinton proposal that wouldboost the renewables’ market share, on a phased-in basis, to 7.5%in 2015. Both the Largent-Markey bill and the administrationproposal would have the renewable mandate sunset in 2015.

Sharp noted the Largent-Markey renewable provision is a “mandatedoing nothing,” given that renewables’ share of the powergeneration market currently is about 3%. Still, NGSA opposes itsimply because it is a mandate.

“I don’t think we need to talk about renewables” in electricityrestructuring legislation at all, said Sharp. “There’s no need tomandate a ceiling or a floor for any fuel. I don’t think Congressshould be in the business of dictating what kind of fuel to use,”he told NGI. Even if lawmakers were proposing a mandate for naturalgas, “we’d probably oppose it – believe it or not.”

And he thinks many key energy lawmakers share this view. “Basedon what I heard from congressmen at [a recent] hearing, I think arenewable portfolio mandate is going to have a very difficult timestaying in the bill. My sense is that the majority of people on the[House] Energy and Power Subcommittee do not endorse a fuelmandate.”

But apart from the mandate provision, Sharp – like many others,including Energy Secretary Bill Richardson – had high praise forthe Largent-Markey bill. “I think it’s a bill that would easily bethe markup bill for the Energy and Power Subcommittee. Thisinitiative is reflective of a great deal of consensus.”

Martin Edwards of the Interstate Natural Gas Association ofAmerica (INGAA) said he wouldn’t go as far as to call thelegislaiton a markup bill, but “I think it should be takenseriously.” He believes there’s a lot to like about it. “I think ingeneral it’s good to have a bipartisan bill of that nature outthere in the public forum. It builds on a lot of what theadministration has [proposed].”

Sharp particularly liked the provision that would grandfatherstates, which enact retail-choice legislation by January 2001, fromfederal restructuring legislation. He believes the provision is anessential ingredient to restructuring. The Clinton administrationmeasure doesn’t include a grandfathering provision.

The Largent-Markey bill would require regulated andnon-regulated utilities to offer retail choice to consumers by Jan.1, 2002 – one year sooner than what’s called for in theadministration’s bill. However, it would allow states andnon-regulated utilities to “opt out” if they find, after noticeand hearing, that retail competition will have a “negative impactupon a class of customers that cannot reasonably be mitigated.”

Other key provisions in the bill would: give FERC authority tooversee the creation of regional transmission organizations; awardstates authority over stranded-cost recovery; give FERC authorityto approve and form a reliability group; exempt holding companiesfrom the Public Utility Holding Company Act, with the exception ofthose serving two or more states that are closed to retailcompetition; repeal the Public Utility Regulatory Policies Act;place the Tennessee Valley Authority’s transmission underCommission jurisdiction; subject the Bonneville PowerAdministration to FERC authority; provide for retail reciprocitybetween states; and offer consumers protection against “slamming”and other illegal acts. Many of the provisions are similar to thoseproposed by the Clinton administration.

Susan Parker

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