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Bipartisan Energy Politics? 105th Congress Takes on Electric Restructuring in Earnest

Fortnightly Magazine - March 15 1997

"It's going to take a lost of time to understand all the pies."

It's almost spring. There's a new energy secretary(emisn't there? And at least for new electric restructuring bills in Congress. Sen. Frank H. Murkowski (R-Alaska) is chairing "workshops" on deregulation at the Energy and Natural Resources committee.

Everyone's wondering: Which bill take hold? Where will it be and how will it look by the end of the legislative session: dead, alive, or limp?

Only time and lobbying will tell, as the Senate and the House are approaching restructuring in different ways, both in substance and in pace. But here's what industry reps, legislative aides and a onetime energy Committee chairman told PUBLIC UTILITIES FORTNIGHTLY as Congress Convened:

• A bipartisan issue. "Consumer choice" isn't political. Everyone appears to want an end to the utility monopoly so that consumers can buy cheap, reliable power. At the start of the session, legislation flew from all sides. A draft bill surfaced from the Department of Energy, expected to be followed by an Administration bill. House and Senate Republicans and Democrats authored more defined bills. An aide to one Democratic congressman says his boss has long wanted to work with Rep. Dan Schaefer (R-Colo.) on a bipartisan measure. Rifts may turn out to be regional(emlow-cost vs. high-cost states(emor philosophical: Is the best route to competition wholesale or retail?

• Congress needs schooling. Few legislators know the issues well. This is where Murkowski will shape the debate. His first workshop was set for March 6. He hopes to discover how states already promote competition, what the impediments are, the role of public power and what Congress can do. Murkowski's philosophy, in sum: "Go slow until we know." He'll tackle state preemption and jurisdiction, stranded costs, taxes, renewables and market power, among other issues.

• Lobbies stand firm. Their influence is written between the lines of all the early legislation. The differences between consumer groups and utilities are well known. But utilities are siding with consumers against industrial users they claim only want to shoulder half the stranded-cost load. That is the stance of the Alliance for Competitive Electricity, or "ACE," a new group of utilities with medium to heavy stranded costs. Some of these companies have already won hard-fought restructuring battles at the state level. ACE has contracted J. Bennett Johnston, the former Democratic senator from Louisiana and Murkowski's one-time colleague on the Energy and Natural Resources Committee, to be its advisor and strategist in the fight on Capitol Hill. (Johnston retired last year and is precluded from lobbying or contacting his former colleagues for 12 months.)

Before leaving office, Johnston sponsored S. 1526, which would provide for recovery of stranded costs. It also would require states to either set up a competitive wholesale market, a retail market, or some other "fair program." The year 2010 would serve as a startup date. The Federal Energy Regulatory Commission would define "stranded costs." Parts of this initiative have crept into ACE's agenda.

Exploring all the restructuring issues and addressing them in a cogent piece of legislation is a task whose

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