The electricity restructuring legislation that survived markupby the House Energy and Power Subcommittee late Wednesday is ashell of the bill that was sponsored by Chairman Joe Barton (R-TX),energy industry analysts say.

“There ain’t much of a bill left. Markup was not a pretty scene,but it got done… There were several amendments passed that prettymuch took what remaining [federal] authority the bill had and kindof sucked it away,” said a gas industry analyst.

The marked-up bill, which squeaked by the subcommittee in a17-11 vote, included several amendments that “pretty much gutted”provisions that would have expanded FERC’s authority in certainareas, such as utility mergers, and would have given itjurisdiction over protecting consumers, interconnections to thetransmission grid, aggregation and net metering. The amended billwould turn over these issues to the states.

“All of the powers will be kept to the state level. Nearly allof the new authority that was proposed for FERC has in my humbleopinion been gutted,” the gas analyst noted. He said probably themost damaging amendment that passed was the one offered by Reps.Albert Wynn (D-MD) and Robert Ehrlich (R-MD), which he estimated,scrapped “about five or six sections” of Barton’s bill. It eitherpurged or watered down “nearly all of the areas where there waspotential federal authority,” he said.

“I’m certainly concerned [on this score]. I think that there wasa movement or belief by the subcommittee that more things needed tobe decided by the states. And as a consequence, things likemergers, things like interconnects and so on were all basicallypunted to the states to decide,” noted John Sharp, director ofstate and federal regulatory affairs for the Natural Gas SupplyAssociation. “In the end, they gave too much stuff to the statesand took too much from FERC.” He especially was concerned by anamendment sponsored by Rep. Cliff Stearns (R-FL) that eliminatedthe reciprocity section of Barton’s bill.

“I don’t agree at all with what was done to the reciprocityprovision. Basically, the original Barton provision said that ifyou [a generator] are in a closed state, you cannot sellelectricity into or compete in an open state. But the subcommitteedecided [during markup] that these reciprocity provisions on thefederal level were inappropriate and struck them.” Sharp also saidthere were “a lot of changes to the distributed power section,”which he hopes will be either eliminated or modified by the fullCommerce Committee.

Commerce Chairman Thomas Bliley (R-VA) has pledged to bringrestructuring legislation before the committee early next year.”My guess would be that Chairman Bliley [first] would want tore-write this bill. It doesn’t represent anything close to what hebelieves in,” the gas analyst said. And, he added, getting arestructuring bill through the full committee will be tough. “Idon’t think that there’s very many members who are willing totinker with the status quo on this at all. They’re just very riskaverse.”

Prior to markup, Bliley said that while he was “pleased” thesubcommittee was “finally taking this initial step” towardsrestructuring the power industry, “I would be remiss if I did notmention that I still have concerns about this particular bill.” Forexample, “I don’t know if this bill strikes the right balance forconsumers. I have questions about the [Public Utility Holding Act]provisions and the market-power provisions.”

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