This fight is for the heart and soul of regulation everywhere. The Federal Energy Regulatory Commission (FERC) won the first round on February 22, but I think there's more to come.
Speaking last fall in New York City, Rep. John D. Dingell (D-MI), the ranking Democratic leader of the House Commerce Committee, questioned the need for federal legislation on electric utility restructuring, and even warned the audience that passage of any federal legislation in the 105th Congress to require electric competition was far from guaranteed.
The occasion for the talk was a conference entitled, "Deregulation (em The Changing Electric Utility Industry (em Opportunities and Risks," sponsored by the financial house of Bear, Stearns & Co. Inc., and the law firm of Weil, Gotshal & Manges, LLP.
Dingell queried whether the electric industry needs federal regulation, and said that Congress should to examine how a change in regulation will affect utility stocks and bonds. He called for Congress to respond with caution to cries for electric industry competition because it "is not an industry in crisis, but there is however, a real danger that the Congress could put this industry to the brink of crisis." Dingell added that the energy bills introduced in the 104th Congress were "long on economic theory but short on practicality," and not supported by sufficient economic analysis.
Dingell characterized the Energy Policy Act of 1992 as a response by Congress to changes arising from the natural flow of the industry. But the call for greater reform at the state level is different, he said, and does not necessarily mean the federal government should act. Dingell referred to the electric competition bill introduced by Rep. Dan Schaefer (R-CO) and endorsed by Commerce Committee Chair Thomas J. Bliley, Jr. (R-VA), as having "set aside state's rights." He added that he had not reached a conclusion as to whether the U.S. electric industry as a whole should be reformed. The Schaefer bill, calling for full retail competition by the end of 2000 would be too difficult to implement, he concluded.
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