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DOE Builds Base for Administration's Restructuring Bill

Fortnightly Magazine - February 15 1997

And while research and development is a valuable public good, it may not be feasible in high-cost regions of the country, he said.

At the New Mexico hearing, speakers tackled stranded costs, regional approaches to transmission systems, reliability and federal scope. There was recognition that the industry is becoming regional, but speakers cautioned against creating another level of government. Robert W. Gee of the Texas Public Utility Commission, however, said that another government layer might not be needed, that the states simply could cede part of their authority to a regional body.

Gee argued for treatment of stranded costs on a local, not federal, level. The consensus of the panel of speakers, in fact, seemed to be deferring to the states.

Kati Sasseville of Otter Tail Power Co. said that while investor-owned utilities should not be allowed to subsidize other components of their business, by the same token, the federal government shouldn't subsidize preference customers or PMAs. "My question is: Given the political realities that we all are aware of, is the Department of Energy in the next session of Congress, in the legislation that is being offered, going to do the right thing, or are you going to give in to the political interests?"

"The clear answer is we will do the right thing," replied Robert R. Nordhaus, DOE general counsel. Nordhaus later came back to the question: "I am sure we will do the right thing to the best of our ability. Obviously, not everybody agrees what the right thing is."

At the Chicago hearing, reliability was on the agenda. Roy Thilly of the Wisconsin public power community said the North American Electric Reliability Council regional system isn't the appropriate model today. "Most of the regional councils are dominated by very large vertically integrated private utilities," he said. "The one we're in at the moment, I think two utilities control the majority of votes."

Richard H. Cowart, chairman of the Vermont Public Service Board, suggested at the New Jersey hearing that in drafting legislation the DOE always remember past policy.

"I'm reminded of the lowly goldfish," said Cowart. "My wife is a biologist and she told me once that the memory span of a goldfish is so limited that every trip around the bowl is an entirely new experience. That's an important metaphor to keep in mind with respect to energy policy. My hope is that as we restructure the electric industry in the 1990s that we remember the lessons we learned in the '60s, the '70s and the '80s." t

Joseph F. Schuler, Jr. is associate editor of PUBLIC UTILITIES FORTNIGHTLY.


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