Unable to end a stalemate over two key issues, Republican andDemocrat leaders of the Senate Energy and Natural ResourcesCommittee sent up a white flag yesterday conceding defeat in theirstruggle to pass comprehensive electricity restructuringlegislation this year. But to show that their efforts weren’tentirely in vain, they voted out a stripped-down reliability bill,which supporters say will provide relief to the bulk power marketas early as this summer.

Chairman Frank Murkowski (R-AK), who has spearheaded the drivein the Senate for comprehensive legislation, said that while he was”very reluctant” to defer action until next year, the difference ofopinions on the two issues — extending FERC jurisdiction toinclude transmission bundled with retail sales and a federalmandate on the use of renewable fuels in generation — forced hishand. The two deal-breaker issues were excluded from a discussiondraft of comprehensive legislation that was circulated to committeemembers earlier this week.

Sen. Jeff Bingaman of New Mexico, the ranking Democrat on thecommittee, “could not support the draft [legislation] without afavorable resolution of those issues, and I simply could notsupport the draft if they were included,” Murkowski said during abusiness meeting of the full committee on Wednesday.

If the Commission’s jurisdiction over transmission wereexpanded, the chairman said he feared that an already “aggressiveFERC” would “retreat from its history of deference to states in theregulation of bundled retail sales, including transmission.” Andwhile he characterized himself as “one of the strongestsupporters…..of renewable energy,” he noted “I’m also veryrealistic about renewable energy and how much it can contribute” tothe nation’s overall energy mix. “We’ve spent about $17 billion onrenewables, yet we’ve only achieved less than 2% [of the energymix] if you exclude hydro.” This level of spending, he believes, isimpractical given that “we’re facing an energy train wreck”

In light of their differences, the chairman said he and Bingamanagreed the “best approach” was to adopt a reliability bill,sponsored by Sen. Slade Gorton (R-WA). The measure gives FERCauthority to begin the process of creating one national electricreliability organization, as well as immediate power to adoptreliability standards for the bulk power system. Also, compliancewith standards, which has been voluntary in the past, would becomemandatory under S. 2071, and transgressors would be penalized.”…..I believe we may [be forced to] revisit this issue on anemergency basis as the pinch and crunch of the current energycrisis is felt,” Murkowski said.

“Not only does this bill provide a long-term solution toelectricity reliability, it will give FERC the immediate authorityto help prevent blackouts. And I hope it will send a signal to anyparties that might be tempted to ‘game’ the transmission system andhurt reliability that they are being watched,” Gorton said in aprepared statement.

The Gorton bill, which was widely supported by the committee,”will not solve all [of] the problems,” but it “will move us in theright direction,” said Bingaman. Sen. Mary Landrieu (D-LA) echoedthe words of former Committee Chairman Bennett Johnston, who saidrecently that “to do reliability only, which is basically all thatwe can agree to, is a good step but it would just evenly distributethe [power] shortage” nationwide.

“I hope that we can cause our leadership to get this [bill]through the Senate and through Congress this year,” noted Sen.Larry Craig (R-ID). If that should happen, Murkowski cautioned theGorton measure should not be considered a substitute for acomprehensive electric bill. “…I do want to make sure thateverybody understands that we [will] not abandon this process.”

Despite Wednesday’s Senate action, some in the power industrystill aren’t ready to give up on the prospect of a comprehensiveelectric bill being passed by Congress this year. They believe itcould happen if the House continues with its “comprehensiveapproach” to electricity restructuring, and the Senate reliabilitymeasure is included in the House bill during conference. “A lot ofgrand slams get hit in the ninth inning of a ballgame,” remarked aspokesman for the Electric Power Supply Association. But the oddsof a House restructuring bill this year aren’t very realistic,given the level of bickering in the chamber over the issue.

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