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PURPA Debate Inches Forward in House

Fortnightly Magazine - April 1 1996

more competitive.

"Central Maine Power Co. has just put on the table an offer to legally separate its generation from its transmission and distribution," he said. "Which should more than assuage Congressman Markey's interest. And it should hopefully make it clear to him once again that he doesn't have to come down with a heavily regulated mechanism to get what he wants. The market is well ahead of what he's trying to do. And the best thing they can do is get out of the way rather than create more hurdles for us."

Cowan recognized the efforts of utilities making forward-looking decisions. But "it's important that we have sort of a national standard of competition so that we would encourage more states to follow this path, more utilities to do it. It's happening very slowly. ... You're not seeing a groundswell of utilities willing to consider a separation option."

Anderson added: "It's pretty thoughtful legislation. It's just that it has the 'D' word in it, or contemplates the 'D' word. So if utilities out there are so willing to contemplate divestiture, it's hard for us to understand why it creates this kind of strong opposition."

H.R. 2929 marks the third bill within the past year to repeal, reform, or amend PURPA. Rep. Cliff Stearns (R-FL) sponsored H.R. 2562 to repeal PURPA's section 210; Sen. Don Nichols (R-OK), through S. 708, wants to repeal PURPA outright.

Markey says that he hopes to work with Rep. Dan Schaefer (R-CO), chairman of the House Commerce Subcommittee on Energy and Power, and Commerce Committee chairman Thomas Bliley

(R-VA) on a bipartisan effort to bring competition into the market.

On the same day the Markey bill was introduced, regulators, policymakers, and interested parties testified before the House Subcommittee on Energy and Power.

Schaefer said competition in electric generation was emerging, prices were dropping, plant efficiency was improving, technology was surfacing, and customer service was getting more attention.

"However, it is clear that our work is not yet complete," he said in a written statement of his subcommittee remarks. "Most of today's witnesses agree that there is not yet true competition in the generation sector, and that repeal of section 210 of PURPA would harm the progress we have made thus far. At the same time, most of today's witnesses would also agree that there have been problems in how PURPA has been implemented. The result has been that some utilities have had to pay higher prices for power generated by some qualifying facilities." (On February 27, Schaefer was to reconvene his House Commerce Subcommittee on Energy and Power to address how far state legislators and regulators are moving toward electric utility deregulation.)

In his testimony on H.R. 2929, Irwin A. "Sunny" Popowsky, consumer advocate of Pennsylvania and vice president of the National Association of State Utility Consumer Advocates, pointed out that PURPA has proven that utilities shouldn't have a monopoly over building and operating power plants: "While many utilities properly complain today about PURPA projects that cost six cents per kilowatt-hour, when the current market cost is