In the first of what may be a series of actual lawmakinghearings, House lawmakers on the energy and power subcommitteeacknowledged last week that for the first time in a couple of yearsthey were starting to see a light at the end of tunnel onelectricity restructuring.

“We’re moving into the next phase, maybe not the last phase, buta very important phase with consideration of our electricitylegislation,” said Rep. Ralph M. Hall (D-TX), the ranking minoritymember of the Commerce Committee panel.

Although the subcommittee has had a number of hearings on theissue, “I think this is the first one [where] the witnesses havereally gotten down to the nitty gritty,” he told a packed hearingroom on Thursday.

Chairman Joe Barton (R-TX) called the hearing so subcommitteelawmakers could begin the tedious task of sifting through the eightelectricity restructuring bills introduced in the House so far,picking out the best approaches and tossing out the less desirableones. This would be followed by mark-up, possibly as early as theAugust congressional recess. “I hope in the very near future tohave a comprehensive bill” on a bi-partisan basis, he said.

Meanwhile, the Senate Energy and Natural Resource Committee alsois moving towards mark-up, but Chairman Frank Murkowski (R-AK) issending mixed signals about when a restructuring bill will emerge.”He said to one reporter that he wasn’t sure it would be this year,but [it would be] this Congress. But then he seems to have goneback on that. He seems to be in more of a hurry now,” said acommittee spokeswoman.

Conspicuously absent from the House hearing was a measure thatCommerce Chairman Thomas J. Bliley (R-VA) and Barton are drafting.”What we have missing from us today is the one bill that’s yet toemerge – Mr. Bliley’s bill. We’re all anxious to see on this side[Democratic] that bill,” remarked Hall.

He commended Barton for “open[ing] the bill development anddrafting process” to all parties. “He brought in everyone from theadministration – [Energy Secretary] Bill Richardson and others [whoare] knowledgeable” on the issue. “I think your approach is thebest way to seek consensus” on electricity restructuringlegislation, he told Barton.

In urging the House panel to continue its “pragmatic, thoughtfuland inclusive approach” to power restructuring, Rep. Cliff Stearns(R-FL) indicated there already was strong consensus on six issues:reform of the Public Utility Regulatory Policies Act; repeal of thePublic Utility Holding Company Act; the need for FERC authorityover currently non-jurisdictional entities, including federalutilities; the need to ensure greater grid reliability; theauthority of states to order retail competition; and promotion ofcompetition through state reciprocity.

Also not included in last week’s House legislative review was acomprehensive bill introduced on Tuesday by Rep. Frank Pallone(D-NJ) that, among other things, seeks to reduce power-plantemissions by using a market-based approach. It also would establisha renewable energy portfolio standard of 7.5% by 2010, which thegas industry opposes. Separately, Rep. Sherrod Brown (D-OH)announced his intention to introduce a new bill that would givelocal governments the option – via a city council vote orreferendum – to pursue “choice” on behalf of their entirecommunities.

Rep. Steve Largent (R-OK), former pro football player turnedlawmaker, has been a key force in the restructuring effort in theHouse. Contrary to reports that the House has “stumbled” on thisissue, he said lawmakers are “continuing to move forward with a lotof momentum” towards a final comprehensive measure.

Steven J. Kean of Enron Corp., speaking on behalf of ElectricPower Supply Association, told the subcommittee a federalrestructuring bill was needed that was both “comprehensive” inscope and “forceful.” He said two bills – the Largent-Rep. EdwardMarkey (D-MA) measure and the Clinton administration’s proposal -met the “comprehensive” criteria. The final bill must be forceful,he explained, because no monopoly “voluntarily surrenders itfranchise.”

He also urged the House panel to address problems associatedwith the transmission grid. He claimed the grid currently is”openly discriminatory, with perhaps [only] 15% of [it] open tocompetitive usage.” This prevents utility competitors fromsupplying cheaper power to states that have already opened up theirelectric markets. “Only Congress can fix the problem.” He believesFERC “must be directed and empowered to ensure non-discriminatoryaccess to the transmission [grid] for all usages and for allsystems, public and private.”

David Owens, executive vice president of the Edison ElectricInstitute (EEI), agreed with Kean on this score, and urged theHouse subcommittee to place all transmission service under FERCjurisdiction. He indicated the restructuring measure of Rep.Stearns would serve as a “good start” on this issue.

Enron’s Kean also cited the need to upgrade the transmissioninfrastructure, which he said has proved to be a difficult taskbecause it’s “almost impossible” to site new facilities today.Owens believes Congress should provide incentives to spur newtransmission construction.

Both men agreed the House subcommittee should take steps toensure greater enforcement of reliability standards. Kean stressedthe need to “recreate and modernize” the North American ElectricReliability Council (NERC) due to the greater amount of gridtraffic stemming from Order 888 and emerging retail competition. Hebelieves a new standard-setting organization should be formed tosucceed NERC, one with “some enforcement muscle.”

EEI’s Owens supported a NERC proposal that would establish anElectric Reliability Organization (ERO), which would ensuremandatory compliance with reliability standards and would besubject to FERC oversight.

He also urged the House panel to eliminate tax benefits andsubsidies for government power entities – such as power marketingadministrations and the TVA – in its final bill. Owens indicatedthe Clinton administration’s restructuring bill moves in the “rightdirection” on this issue.

Susan Parker

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