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Electric Bill Dies; Senate Settles for Reliability

Electric Bill Dies; Senate Settles for Reliability

Unable to end a stalemate over two key issues, Republican and Democrat leaders of the Senate Energy and Natural Resources Committee sent up a white flag last week, conceding defeat in their struggle to pass comprehensive electric restructuring legislation this year.

But to show that their efforts weren't entirely in vain, they voted out a stripped-down reliability bill, which supporters say could provide real relief to the bulk power market as early as this summer. Critics, however, contend it's nothing more than a token measure.

Chairman Frank Murkowski (R-AK), who has spearheaded the drive in the Senate for comprehensive legislation, said that while he was "very reluctant" to defer action until next year, the difference of opinions on the two issues - extending FERC jurisdiction to include transmission bundled with retail sales and a federal mandate on the use of renewable fuels in generation - forced his hand. The two deal-breaker issues were excluded from a discussion draft of comprehensive legislation that was circulated to committee members in mid-June.

Sen. Jeff Bingaman of New Mexico, the ranking Democrat on the committee, "could not support the draft [legislation] without a favorable resolution of those issues, and I simply could not support the draft if they were included," Murkowski said during a business meeting of the full committee last Wednesday.

If Commission jurisdiction over transmission were to be expanded, the chairman said he feared that an already "aggressive FERC" would "retreat from its history of deference to states in the regulation of bundled retail sales, including transmission." And while he characterized himself as "one of the strongest supporters.....of renewable energy," he noted "I'm also very realistic about renewable energy and how much it can contribute" to the nation's overall energy mix. "We've spent about $17 billion on renewables, yet we've only achieved less than 2% [of the energy mix] if you exclude hydro." This level of spending, he believes, is impractical given that "we're facing an energy train wreck"

In light of their differences, the chairman said he and Bingaman agreed the "best approach" was to adopt a reliability bill, sponsored by Sen. Slade Gorton (R-WA). The measure gives FERC authority to begin the process of creating one national electric reliability organization, as well as immediate power to adopt reliability standards for the bulk power system. Also, compliance with standards, which heretofore has been voluntary, would become mandatory under S. 2071, and transgressors would be penalized. "...I believe we may [be forced to] revisit this issue on an emergency basis as the pinch and crunch of the current energy crisis is felt," Murkowski said.

"Not only does this bill provide a long-term solution to electricity reliability, it will give FERC the immediate authority to help prevent blackouts. And I hope it will send a signal to any parties that might be tempted to 'game' the transmission system and hurt reliability that they are being watched," Gordon said in a prepared statement.

"I hope that we can cause our leadership to get this [bill] through the Senate and through Congress this year," noted Sen. Larry Craig (R-ID). If that should happen, Murkowski cautioned the Gorton measure should not be considered a substitute for a comprehensive electric bill. "...I do want to make sure that everybody understands that we [will] not abandon this process."

Despite last Wednesday's Senate action, some in the power industry still aren't ready to give up on the prospect of a comprehensive electric bill being passed by Congress this year. They believe it could happen if the House continues with its "comprehensive approach" to electric restructuring, and the Senate reliability measure is inserted in the House bill during conference.

"A lot of grand slams get hit in the ninth inning of a ballgame," remarked a spokesman for the Electric Power Supply Association. Last week two groups, the Electricity Restructuring Stakeholders and leading marketers and utilities pushing deregulation, threw their support behind House Commerce Committee Chairman Thomas Bliley, (R-VA) and his draft legislation, promising to work with him on refinements. Bliley had been criticized for issuing the comprehensive draft under an all-or-nothing label (see NGI, June 19).

Susan Parker

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