[BETA] Fortnightly

After 40 years of wandering in the wilderness as a minority party, House Republicans are ready to slash and burn what they see as a bloated federal bureaucracy. The next two years will demonstrate just how powerful the legislative branch can be when both House and Senate are controlled by a strong-willed party on a mission. Electric industry officials seem optimistic, but cautious, about this Republican revolution. "We're all trying to read the tea leaves," said Patricia Schaub, director of federal governmental relations for Pacific Gas & Electric Co.

Republicans will spend their first 100 days focusing on the regulatory reforms in the "Contract with America." Next on their list is the fiscal 1996 budget resolution, due in mid-April, which will entail difficult spending decisions. Little else, including energy legislation, is expected to move very far until late spring. Industry officials believe they must complete their legislative goals, or at least make a good start, by the end of this year (em before Congress and the White House turn their attention to partisan politics and the 1996 presidential elections and early primaries.

Investor-owned utilities (IOUs) facing increased competition expect to find Congress sympathetic to their calls to repeal what they consider burdensome, restrictive regulations that thwart their efforts to compete. One example: repeal of the Public Utility Holding Company Act of 1935 (PUHCA). Ten of the nation's 14 registered public utility holding companies have written Senate Banking Committee chairman Alfonse D'Amato of New York, House Commerce Committee chairman Tom Bliley of Virginia, and others urging "prompt repeal" of PUHCA. They say the New Deal law is "antiquated, unfair, and unnecessary" in today's more competitive environment, where state regulators and the Federal Energy Regulatory Commission (FERC) have adequate resources to protect consumers. The Securities and Exchange Commission seems to agree with the holding companies, according to a "concept paper" that questions PUHCA's viability. One industry lobbyist says chances for repeal of PUHCA are greater than ever: "We're committed now to the cause of repealing [PUHCA]. We're moving down that road."

The Public Utility Regulatory Policies Act of 1978 (PURPA) is also likely to undergo reform, but it may be complicated by a push this year from a coalition of large industrials seeking Congressional help in implementing retail wheeling throughout the country. Many utilities and their lawmakers will resist the effort, arguing that the FERC has only begun to use its new authority to order wholesale transmission access, and that a more competitive bulk-power market should be in place first.

After the "Contract with America," one of the first priorities of the House and Senate energy committees will be to resolve the impasse over nuclear waste storage. Approximately 26 utilities have nearly exhausted their storage capacity for spent nuclear fuel, and the Department of Energy (DOE) has acknowledged that it will be unable to meet its responsibility to begin accepting spent nuclear fuel by January 31, 1998. DOE estimates that a permanent repository probably will not become available until 2010, but by then 80 generating plants will be out of storage space. Both Bliley