Senate Energy Chairman Frank Murkowski last week took anothershot at what’s fast becoming his favorite target — FERC. Hechided the Commission for failing to take punitive action againstelectric utilities that “improperly” took power from the grid lastsummer, which lead to near-blackout situations in the Midwest.

“I think they should [have]…..assessed some kind ofappropriate fine or whatever other authority that they felt wasnecessary, but to just say ‘shame on you’ I don’t think is adequateor reasonable,” the Alaskan Republican said following a speech tothe annual meeting of the United States Energy Association inWashington D.C.

“If they [FERC] haven’t got the teeth to enforce it, they shouldask Congress for the legislative authority” to do so,” he toldreporters. “I think they had the capability to enforce it [lastsummer], but they didn’t do it.”

Murkowski emphasized the ball’s in the Commission’s court. “It’snot up to us [Congress] to figure out all the cures…..They [FERC]spend all their time on this area and they know” what’s needed toensure grid reliability this summer.

The threat of brownouts and blackouts this summer is “veryreal,” Murkowski said. “I’m told that yesterday [last Tuesday] wewere near a blackout situation in one area [where] we had pricespeaking at about $6,000.”

As for electricity restructuring, he noted Senate Republicansgot together last week for a “skull session” on the various bills -four are comprehensive and four are “narrower in scope” focusingmostly on reliability. “Surprisingly enough, [we found] there’squite a bit of agreement on many issues. That’s the good news.[But] trying to tie these all in” is going to be a “big job,” hesaid.

Murkowski plans to begin marking up an electricity restructuringmeasure this Wednesday. “Some people say we should have done itlast year, some people suggest that we should wait for a newadministration, but I’m committed to go through this process andsee what we got.” Furthermore, “some [say] why don’t you justconcentrate on reliability. I wouldn’t exclude that, but that’s notmy objective. My objective is to start in with comprehensive andsee where we go.”

Murkowski also criticized FERC again for “dragging [its] feet”with respect to approving the proposed Independence Pipeline to theNortheast. He believes the natural gas pipeline, which would bringCanadian gas supplies from the Midwest to the Northeast, wouldprovide “some relief” to Northeast customers who largely depend onfuel oil.

FERC’s “got an obligation in their ruling [on Independence] toaddress the economic feasibility [of the project]. They’re notsupposed to give anything away, but if an area of the country needsan alternative [fuel] source, I think they should make every effortto try and make sure the economics fit,” he said.

The reverberations of the Commission’s decision on Independencewill be felt this summer, he warned. “Wait until they feel theimpact this year when the air conditioners go on in the Northeast,and those power generating plants that depend on oil have to paytwo to three times what they paid this year. That’s going to affectthe consumer.”

Murkowski further noted Senate Majority Leader Trent Lott (R-MS)intends to introduce this week the “National Energy Security Act of2000,” which will include a mix of energy proposals aimed atreducing U.S. dependence on oil imports by 50% by 2010.

The proposals will seek to promote the use of natural gas byremoving existing disincentives, open up the Arctic Coastal Plainarea to energy development, open up the Overthrust region in theMidwest to development, provide royalty relief for exploration infrontier areas, offer tax incentives to marginal well producers,establish a home heating fuel reserve in the Northeast, extend taxcredits for electricity produced from biomass and solar sources,offer incentives for clean coal technology, expand and improve theweatherization program for low-income families, oppose anywithdrawals from the Strategic Petroleum Reserve unless authorizedby the Secretary of the Department of Energy (DOE), as well as anumber of other measures.

Furthermore, the energy measure will require the DOE Secretaryto closely review the National Petroleum Council’s report onnatural gas, Murkowski said. “It says you’re not going to get there[a 30 Tcf market] from here the way you’re going. Theinfrastructure costs [are going to be] a billion and a halfdollars. If you think you’re going to get cheap gas, you’ve gotanother thing coming.”

Susan Parker

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