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Execs, Bliley Want FERC to Have More Power

Execs, Bliley Want FERC to Have More Power

A number of top energy executives lined up last week to lend their support to House Commerce Committee Chairman Thomas J. Bliley's (R-VA) draft proposal that would give FERC sole jurisdiction over all interstate transmission in the United States --- including the transmission associated with bundled retail transactions, as well as the interstate facilities operated by Bonneville Power Administration, the Tennessee Valley Authority, cooperatives, municipals and utilities in Texas.

An industry observer viewed this show of utility support as "potentially changing the debate.....ending the logjam" over how much jurisdiction to award the Commission for interstate transmission in a restructured electricity market.

This backing by major utilities also "delivers a wound, possibly a fatal wound, to EEI's (Edison Electric Institute) position," which has been to maintain the "status quo.....let the states deal with all bundled transmission as part of their retail jurisdiction," he said. "When you got six or seven major utilities signing off on this thing, including the utility in his [Bliley's] home state, it certainly undercuts EEI's position and helps Bliley."

Bliley floated a discussion draft last week addressing only the "finite question" of transmission jurisdiction. In it, he proposed to give FERC jurisdiction over practically "anybody that's got transmission," the observer noted. The only transmission facilities exempted from FERC oversight would be those used solely for intrastate commerce, such as ones in non-contiguous states like Alaska, Hawaii and Puerto Rico.

As part of Bliley's draft, FERC's jurisdiction would extend to the interstate transmission facilities of utilities in the Electric Reliability Council of Texas (ERCOT). The industry observer viewed this move as a "slap in the face to the only two utilities who would be affected by it" - TXU Corp. and Reliant Energy. Interestingly, the observer noted TXU and Reliant were among the utilities that funneled money to the two Washington D.C. front groups to stop Bliley from successfully carrying out restructuring legislation. Bliley's committee is expected to begin markup of the House restructuring bill, H.R. 2944, this Wednesday.

Energy Secretary Bill Richardson said Bliley's release of his draft proposal on transmission jurisdiction in advance of markup was a "positive step," but he believes a "more comprehensive approach is necessary to fix what is wrong with our electricity markets and to produce a more reliable and competitive interstate grid."

Last Wednesday, the Commerce chairman met with the energy executives from eight companies, who offered a number of "consensus recommendations" mirroring Bliley's own views with respect to electricity restructuring legislation. Utilities represented at the meeting were Dominion Resources, Dominion Generation, Dynegy Corp., MidAmerican Energy, PG&E Corp., TECO Energy, UtiliCorp and Wisconsin Electric.

The band of executives proposed that the Commerce panel clarify in its legislation that FERC has sole authority over all transmission service, both bundled and unbundled, and over all transmission providers. "This would promote the orderly and non-discriminatory development of the wholesale market by ensuring that public, private and cooperative systems are subject to uniform rules and conditions," they told Bliley in a letter outlining their recommendations.

The group also called for the House legislation to assure FERC oversight over regional transmission organizations (RTOs). Specifically, the bill should affirm the work that FERC has already undertaken on these organizations and confirm the Commission's authority to mandate participation in an RTO as a remedy for undue discrimination. "RTOs will help ensure both the reliability of the grid and the development of workable and effective markets," they told Bliley.

The power officials suggested that states - both those that have moved to implement retail competition and those that have not - as well as utilities be afforded a period of time to accommodate to the new regulatory system.

Lastly, they asked that restructuring legislation include reliability provisions that recognize the role states can play in assuring the orderly and efficient operation of the nation's electrical system. "We also note that the reliability titles of most bills before the House and Senate were developed by the North American Electric Reliability Council, and that NERC is continuing its study of the issue. This continuing work should provide reliability solutions compatible with an open and competitive marketplace."

The energy executives who met with Bliley were Tom Capps, CEO of Dominion Resources; Tom Farrell, CEO of Dominion Generation; Rick Green, CEO of UliliCorp; Ken Randolph, general counsel and secretary for Dynegy Corp.; Greg Abel, president of MidAmerican Energy; Richard Lehfeldt, senior vice president of external affairs for TECO Energy; Larry Salustro, vice president of legal, government and regulatory affairs for Wisconsin Electric; and Steve Kline, vice president of federal governmental and regulatory relations for PG&E Corp. Key House proponents of electricity restructuring --- Rep. Joe Barton (R-TX) and Rep. Steve Largent (R-OK) --- also were there.

Susan Parker

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