Repeal of the Public Utility Holding Company Act (PUHCA) is one of the most important things the next Congress can do to spur recovery of the power industry, according to former FERC Chair Elizabeth Moler. Repeal would remove a barrier to capital and help repair the “financial carnage that has afflicted many power companies this year.”

Repealing PUHCA and restoring “access to capital that is now not available is a huge issue,” Moler told Natural Gas Intelligence, adding that she believes the new Congress will act on energy measures fairly early next year. Moler, who recently moved up a notch to executive vice president, government and environmental affairs, and public policy, at Exelon Corp., warned that the Congress should do “nothing to undermine FERC’s authority to implement SMD [standard market design] or the Commission’s development of competitive markets.

“Under the current circumstances, we are hearing a lot from the ‘shrill voices,'” which don’t necessarily represent the majority, Moler said. “There’s a lot of support for what the Commission is doing, and we are absolutely in that camp.” Moler characterized the “shrill voices” as coming from the “just say no crowd, or those who want to be active in others’ backyards and other marketplaces, but not in their own service territory.” The Southeast is a case in point.

Also, there are some “red herrings.” For instance, the Pacific Northwest stance that FERC’s SMD formula cannot deal with hydropower. “That’s ridiculous. You have to build special rules; New Englanders have worked hydropower into their market development efforts. It’s just silly to say you can’t have hydropower in a marketplace,” Moler said. And “unless they make progress in the West, there could be further repercussions.”

There always is reaction and “a lot of negative response” when the Federal Energy Regulatory Commission puts out a major proposal; “we offered 90 pages of comments, but the aim is to sharpen the ideas.” She believes FERC has all the authority it needs to get the job done and there is no need for a regional transmission organization (RTO) title in the next energy bill.

Across the country “the whole subject of the need for infrastructure development in the industry is really very serious. FERC will have to deal with that.” The key is “what FERC does with respect to market mitigation issues. Developers, either integrated or stand-alone-developers, will not build new generating capacity if the only thing they get is rates capped at their short run marginal cost. There is going to have to be a recognition of that when the Commission visits the issue of when mitigation rules come into effect.”

Other issues Moler would like to see Congress address include reliability authority for FERC, and a “FERC-light” approach to regulating public power entities. This would mean giving the Commission authority over terms and conditions for municipals and co-ops “so they can be active participants in the marketplace,” but not over their rates.

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