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Murkowski Previews Electric Restructuring Bill

Murkowski Previews Electric Restructuring Bill

Senate Energy Committee Chairman Frank Murkowski (R-AK) unveiled a draft electricity restructuring proposal last week that couldn't be more friendly to natural gas had the industry itself written the measure.

Foremost, the draft --- unlike the Clinton administration's proposal --- doesn't include a federal mandate requiring the use of renewable fuels in power generation. A renewable mandate also is noticeably absent from the House restructuring bill, which is before the Energy and Power Subcommittee.

The mandate was omitted because the federal government "shouldn't pick [the] winners and losers" in the energy markets, Murkowski told lawmakers and energy executives last Thursday at the 1999 National Summit on Electricity and Natural Gas in Washington, D.C.

The committee chairman outlined for the first time the key principles he believes should be included in a bill. He said he plans to hold hearings on his draft when Congress convenes next year. And he will only formally introduce legislation reflecting his principles if there's a "reasonable chance of forming [a] consensus" in the committee.

In addition to natural gas, Murkowski was particularly kind to the states in the draft proposal. It precluded federal preemption of state restructuring programs, as well as a date-certain for states to comply with federal restructuring legislation. Further, the draft drew a clear division between the jurisdiction of the federal government and the states, giving states responsibility over all retail sales within their borders and FERC sole jurisdiction over the interstate market, including wholesale power competition.

Moreover, it clarified that states have the authority: 1) to protect electric consumers in their states; 2) impose a "wires" charge to fund state public purpose programs; 3) to establish reciprocity requirements; and 4) over retail sales of electricity to federal facilities.

Probably the most "controversial" provision would give utilities the right to assert eminent domain when building new transmission facilities, Murkowski said. But this can only be done when the new facilities are "proposed in accordance to a regional planning process, and the line cannot be built through the state process." Hydroelectric facilities and gas pipelines already possess the right to federal eminent domain, Murkowski noted, and he thinks it time power transmission had it.

Furthermore, the draft would give FERC jurisdiction over all interstate transmission lines, not just those owned by investor-owned utilities. And it supports voluntary participation by utilities in regional transmission organization (RTOs), and would set standards for the Commission to follow in creating such groups.

Murkowski noted the Senate Finance Committee will address at an Oct. 19th hearing the issue of whether municipally owned utilities should be allowed to continue to issue tax-exempt bonds to build new facilities, when investor-owned utilities can't. "The question is [is] that fair competition," Murkowski asked, and added that he didn't think so.

Susan Parker

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