To predict the Clinton Administration's next step is foolhardy. And when it comes to the first federal restructuring bill, it's riskier still to rely on drafts that apparently were leaked to gauge...
DOE Builds Base for Administration's Restructuring Bill
To predict the Clinton Administration's next step is foolhardy. And when it comes to the first federal restructuring bill, it's riskier still to rely on drafts that apparently were leaked to gauge reactions of the energy industry and media.
"There have been a gazillion versions of the bill which have been prepared," says a Department of Energy official. "Unless you have a copy that's been dated within the past week (em the past several days (em it's likely to be of not a whole lot of value."
That said, there are some aspects of the DOE's draft restructuring legislation likely to make it through the rewrites. The "final draft" was to be released for interagency review this month to the Environmental Protection Agency, the departments of Defense and Agriculture and other government units.
The DOE, in an early proposal, clearly took some positions of those who spoke at its four public meetings in late 1996, while rejecting the leanings of others. The bill shapes up as a Democratic bill, in contrast to H.R. 3970, introduced in the last Congress by Rep. Dan Schaefer (R-Colo.). One exception is that both bills propose a portfolio standard for renewable energy. (Rep. Schaefer expects to reintroduce his slightly altered bill this month.)
The most notable aspect of the DOE draft is that it would allow each state to vote yes or no on retail customer choice. If the state rejects retail access, it can fall back on an alternative plan for wholesale competition only. That would mean that utilities could get electricity supplies anywhere, but consumers would have no choice and little control over energy prices. This idea seems to counter broad thinking on "choice."
Utilities would be required to show no preference when it came to buying their own power under the DOE scheme, but it's unclear who would play policeman. This "loophole" seems to cater to states with low-cost power that are unwilling to follow the retail-choice road.
The draft bill also calls for consumer disclosure information, requiring that utilities reveal the generating source, emissions, price and other information about electricity they are buying. This requirement seems to ignore market realities in that brokers, who bring power buyers and sellers together, don't disclose generation sources as part of their usual business regime.
The draft bill would reverse prior law on electric holding company mergers and give the Federal Energy Regulatory Commission the say-so in approving holding company mergers. To put it mildly, state commissions would hate this provision. If passed as is, the bill could affect at least one pending merger; Pacific Enterprises and Enova Corp. are counting on an exemption under the current law.
One portion of the bill worth watching is the re-alignment of federal and state jurisdiction on retail transmission services. It appears as if the bill endorses FERC's jurisdictional claim, made in Order 888. The matter has become one of the order's most controversial. Whether the final bill repeals 888 on this point undoubtedly will be of great interest.
Other parts of the DOE draft bill worth noting:
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