Seeking to allay concerns voiced by lawmakers in the Southeast over FERC’s plans to overhaul the nation’s electricity grid, the House Energy and Commerce Committee last week backed a proposal that will allow that part of the country to have an explicit protection of its native load.

The action took place at a markup of national energy policy legislation at the House Energy and Commerce Committee.

Rep. Joe Barton (R-TX) noted that the electricity title that came out of the House Energy and Air Quality Subcommittee had no specific provision addressing native load. Barton chairs that subcommittee.

“A number of members on both sides of the aisle at subcommittee expressed concerns that their constituents and their states might somehow be disadvantaged without some explicit protection for native load,” Barton said.

The most vocal member on the subject of native load has been Rep. Charlie Norwood (R-GA). At the subcommittee markup of the bill, Norwood proposed, and then withdrew, an amendment that would have clarified that the retail sale of electricity “and any component service thereof, including transmission, is subject to the jurisdiction of the states.” Norwood argued that under its standard market design proposal, FERC “seeks to assert and exercise jurisdiction that is currently exercised by the states as it’s always been.”

Barton said that in response to his native load proposal, “members of the committee on both sides of the aisle have expressed concerns that the native load protection in the bill might, in some way, hinder their regions. The members that expressed those concerns are primarily members in regions of the country and states that have already joined” regional transmission organizations (RTOs) “and are in a system where the state operates the system.”

To address these concerns, Barton’s amendment exempts certain regions of the country from the native load provision. Regions exempted from the native load provision are overseen by PJM Interconnection, the New York Independent System Operator, ISO New England, the Midwest Independent Transmission System Operator and the California Independent System Operator, Barton said.

“The specificity of the amendment that I’m offering is to protect those regions whose members on this committee have come forward and asked to be exempted from the Norwood language in the native load clause that is now in the chairman’s mark,” Barton said.

“So we’re trying to please all regions of the country. Those parts of the country that think they need some native load protection — we’ve put that in at the suggestion of Congressman Norwood. Those regions of the country that feel like they perhaps do not need, or in someway that native load protection might be more harmful than helpful, we are explicitly exempting them.”

In the Southeast, several electric utilities and municipals are working to form the SeTrans RTO. FERC in October issued an order signaling that the SeTrans RTO was headed in the right direction. Among other things, the agency approved the RTO’s plan to create a third-party independent system administrator to control RTO members’ transmission facilities in South Carolina, Georgia, Alabama, Mississippi, Louisiana and parts of Florida and Texas.

Barton’s amendment drew a skeptical response from Rep. Ed Markey (D-MA). While the proposal covers allocation of transmission rights, “what about other equivalent trading rights, such as a financial right to transmission — including an option, a forward contract or an over the counter derivative involving transmission? Is that also included? Not clear and not likely.”

The Barton amendment was passed by the committee on a vote of 31-19.

Meanwhile, the committee voted 28-20 to accept an amendment offered by Rep. W.J. “Billy” Tauzin (R-LA) that would prohibit FERC from going back and abrogating contracts for already approved generator interconnections with transmission systems.

Tauzin, chairman of the committee, said the amendment clarifies “that the public interest standard should be applied by FERC when reviewing existing contracts for interconnection agreements, but should remain prospective for all contracts approved by the Commission. In the current law, FERC can order utilities to interconnect with generators. Typically however, the parties negotiate these interconnection agreements and then seek the FERC approval of the negotiated contract.”

The panel voted down a proposal by Rep. Anna Eshoo (D-CA) aimed at clarifying FERC’s authority over refunds involving power purchases made by the California Department of Water Resources (DWR).

At the markup, questions emerged about whether Eshoo’s proposal could lead to the abrogation of long-term power contracts, so she withdrew her initial amendment and reworked the language with fellow California members.

Eshoo altered her amendment to ensure that all sellers of electricity are accountable for refunds “if they gouge the state” and focused on short-term purchases made by California, as opposed to long-term contracts. In addition, Eshoo changed the date of the refund period to begin on the date when the state started buying power from suppliers. But, even with the changes, her proposal was defeated by a vote of 21-30.

The overall energy bill was approved by the committee in the early morning hours of Thursday by a vote of 36-17. Barton has said that he hopes to have the measure on the House floor sometime this month.

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