While Congress played political football with draft electricrestructuring legislation, natural gas pipelines urged legislatorsto take a page from the history of natural gas deregulation andgive FERC enough authority to effectively oversee the nationalelectric grid.

“One set of rules is certainly more effective and lessburdensome on private enterprise than 50 different sets of rules,”Jerald Halvorsen, president of the Interstate Natural GasAssociation of America (INGAA) said in a letter sent last Wednesdayto Joe Barton, R-TX, chairman of the House Subcommittee on Energyand Power. “Our pipeline regulation was not restructured because ofpassage of new legislation on Capitol Hill. Rather, the FederalEnergy Regulatory Commission, with Orders 436 and 636, used itsauthority to restructure our industry into the ‘open access’ modelthat exists today…..Having one clear set of rules at the nationallevel was a crucial component to implementing these changes —changes which have resulted in lower natural gas prices, newservices and better reliability for all classes of natural gascustomers.”

INGAA suggested the committee should allow FERC to provide for”transcos” or private transmission companies as well as RegionalTransmission Organizations (RTOs). The pipeline group said itsupports the electric supplier information disclosure section ofthe draft because “we believe consumers will be more likely topurchase electricity from clean resources, such as natural gas, ifthey are better informed about the generation and emission profilesof electricity suppliers.”

The pipelines also strongly supported draft language dealingwith interconnection standards for distributed generation, sayingthey believe on-site generation is “an important trend for thefuture.” And while it is an advocate of repeal of the PublicUtility Holding Company Act, INGAA said it was concerned newauthority the draft would give to FERC and the states to reviewbooks would cause “burdensome disclosures and regulatory fishingexpeditions.”

Meanwhile, Barton, the subcommittee chairman, reacted topressure to produce a bill from to Chairman Thomas Bliley, R-VA,chairman of the parent Commerce Committee, saying he wasn’t sure hecould get a majority of the subcommittee to vote it out. “Does theesteemed Committee Chairman expect me to deliver a corpse? We wantto deliver a healthy baby to the full Committee, not abarely-breathing, desiccated husk of a bill.”

In his letter to Bliley last Wednesday, Barton said he would dohis best to put out a bipartisan bill by the middle of October intime for action before the end of the session Oct. 29. By FridayBarton had issued the latest draft, which appeared to come down onthe “barely breathing” side. The draft also appeared to incorporatesome of INGAA’s wish list.

FERC authority to mandate membership in RTOs was gutted and”FERC is barred from imposing any specific RTO structure.” TheCommission also may only order an expansion of interstatetransmission facilities upon application by an electric utility ortransmitting utility and states would have a role in siting. FERCalso is directed to give deference to state commissions indetermination of transmission facilities. It however, would havethe authority to consider the effects of mergers on competition inwholesale and retail markets. Currently, FERC may not evaluatelocal competition in its examination of prospective mergers.

The new draft also would narrow FERC and state authority in theexamination of books and records of holding company subsidiariesand affiliates to review only for the purpose of identifying costs.

The definition of distributed generation facilities eligible forinterconnection would be limited to facilities with a capacity of50 MW that serve retail electric consumers at the facility. FERCmay order interconnection of other generation facilities to promotecompetition.

“We will be holding a legislative hearing on H.R. 2944 in thenext two weeks, and plan to move to a mark-up shortly thereafter,”Barton said. “I am proud to say that we are right on target -within two weeks of the original timetable Chairman Bliley and Idiscussed in January.” Ellen Beswick

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