In his first visit ever to FERC, Energy Secretary BillRichardson last week drove home the need for a federal electricityrestructuring bill and the importance for the Commission to have apivotal part in that effort.

“I know some critics suggest that FERC should not play such aprominent role. I disagree. I think that FERC has a vital role toplay…..because of your record [in restructuring], because therehas to be some oversight – not because we want to give you a newfunction,” he said in a speech to Commissioners, staff and energyindustry executives last Wednesday.

Richardson noted the anti-FERC sentiment on Capitol Hill was the”genesis” for a critical advertisement in Roll Call, the newspaperthat covers Congress. “If you look at the ad and you look at what alot of critics are saying,” he said, the message is the same: that”you should play no role” in electricity restructuring. “I thinkthat that is dangerous.”

He noted the Clinton administration’s two biggest problems withthe legislation proposed by Rep. Joe Barton (R-TX) is its failureto give FERC authority to redress market-power problems in theretail market, and its reduced oversight role for the Commission.

The administration sees the Commission assuming “an evolutionaryrather than a revolutionary” function in restructuring the powerindustry, Richardson said. As such, “we need to ensure that FERChas sufficient jurisdiction over all significant transmissionproviders, including the Department of Energy.” In addition. itneeds to be able to promote the development of regionaltransmission organizations (RTOs). And “FERC should have a role inprotecting the reliability of [the] bulk power grid.”

He stressed the need for federal legislation. “…..[S]tates areleading the way, but we need federal action. We need to reduce the[many] federal impediments that exist. Electrons don’t heed stateborders. Electricity markets are becoming increasingly regional.”

The administration doesn’t support the Barton bill in itscurrent form, but “we do believe it has some positive elements, and[is] a positive sign that Congress is making progress on thelegislation,” he said.

“I think [the bill’s] now at a stage where the subcommitteeshould act on it, should not postpone, should do hopefully amarkup” and move the legislation to the full Commerce Committee,which then could take it up early next year, Richardson said. Henoted the House Energy and Power subcommittee is scheduled to markup the “revised version” of Barton’s bill next week.

Although he concedes it will be a difficult task, Richardsonsaid the administration still intends to push for a mandate thatwould require utilities to use renewable fuels to generate 7.5% oftheir electricity annually. Neither Barton’s bill nor a proposal bySenate Energy Committee Chairman Frank Murkowski (R-AK) contain arenewable provision.

“…[W]e are going to push very hard. We want 7.5%. It is notunreasonable to [say] 7.5% should be solar, wind, biomass,” hesaid.

Susan Parker

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