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

Fortnightly Magazine - March 15 1997

immensity isn't lost on lobbyists like Tom Dennis of Southern California Edison. SCE contributed to the formulation of Assembly Bill 1890, the restructuring law enacted late last summer in California.

"To be truthful, I don't see legislation passing in the United States Congress in 1997 and signed by the president of the United States," Dennis says, "I think this issue is enormously complex. It's going to take a lot of time to understand all the pieces."

But, "There are two things everyone agrees on right now," says an aide to Rep. Schaefer. "And that's electricity deregulation is one of the biggest issues of the 105th Congress, and ... that the industry will be deregulated."

Looking at the early legislation and listening to comments made by "power players" in the House, Senate and Administration, there's consensus on some issues, conflict on others.

On states' rights, for example, Murkowski and the DOE's Charles B. Curtis agree the states ought not be subjected to a federal mandate for customer choice at the retail level. A state ... "may elect" to open up retail markets, reads the draft of Dale Bumpers' (D-Ark.) restructuring bill.

But Schaefer's bill, re-introduced last month with technical changes, essentially calls on states to mandate retail access, because if they don't act, the FERC will step in. And the legislation expected to be re-introduced by Edward J. Markey (D-Mass.) would require states to go through retail-wheeling proceedings. If states choose the retail route or divest generation, they're released from the mandatory power-purchase requirement in the Public Utility Regulatory Policies Act of 1978, and from certain other mandates in the Public Utility Holding Company Act of 1935.

Markey has urged Schaefer for more than a year to work on a bipartisan bill. "Schaefer has generally indicated interest in doing that too, but he's never gone beyond that aid actually say, 'OK, we'd like to work together, and get out staff together and work in the bill,'" says a Capitol Hill source. The observe adds that there is concern from within the Schaefer camp about their retail wheeling "mandate."

The drafts from Bumpers and the DOE and Schaefer's 1996 bill, among other measures, emphasize renewables and the environment. Murkowski, however, veers, here.

Signs point to agreement on eliminating PURPA and PUHCA, at least in the early draft legislation. And on stranded costs, Bumpers and Schaefer appear aligned. At the DOE, however, the jury was still out earlier this year.

Not much is expected from the draft bill the DOE circulated through various government agencies. "By the time it gets through interagency review, I think it'll will come out pretty wimpy," says one Hill Republican aide.

But to allow states to address stranded costs is "where everybody seems to be headed," says Dennis of SCE.

So, while the players have staked out positions on the obvious issues, they have paid less attention to items such as transmission to items such as transmission and distribution, asset divestiture, market power, alleged subsidies for public power and the fate of workers displaced by the corporate restructuring that competition