[BETA] Fortnightly

Electric's Players Tell Senate Panel Where to Jump In, Butt Out

With three hearings behind it, what has the Senate panel on electric restructuring learned from regulators, utility execs and other industry types who have testified?

Granted, some candor has emerged from all the maneuvering and positioning typical of electric industry and sector leaders, but is that enough for the Senate Committee on Energy and Natural Resources to develop a position on federal legislation, without input from energy consumers and the voting public?

Sen. Frank H. Murkowski, committee chair, said he expected to hold more workshops to explore the fuel, financial and consumer implications of restructuring. On the House side, Rep. Dan. Schaefer (R-Colo.), chair of the Energy and Power Subcommittee, planned four "field hearings" from April 14 to May 9.

Elizabeth A. Moler, chair of the Federal Energy Regulatory Commission, shared some of the more frank testimony on March 20 when she voiced "personal opinions" on the subject before the committee. She said she did not doubt federal legislation establishing national policy would make the power supply industry more efficient, competitive and reliable.

She acknowledged that Order 888 is limited in scope: Much of the electric power grid (em the transmission facilities of federal power marketing administrations, the Tennessee Valley Authority, municipal and cooperative utilities, and ERCOT utilities (em lies beyond the FERC's reach, leaving a 30-percent gap in jurisdiction.

"Nationwide open access has some holes," she said. "Federal legislation is necessary to fill these holes."

At the previous week's hearing, others drove home the same point. Richard Munson, executive director of the Northeast-Midwest Institute asked: "How can you ignore a key sector and exempt them from competition?" Munson said the similarities in the lobbying points of private and public power struck him. "True competition can't be realized if you don't include public power," he said.

Moler said Congress should promote choice at the retail level. "Direct the states to establish consumer choice programs, but with the opportunity to opt out if a state determines that retail competition is contrary to its own needs and interests."

Moler envisions Congress, not the FERC, setting principles. States should have the opportunity to challenge these points, and challenges should not come to the FERC, she noted.

Moler also called on Congress to eliminate the Public Utility Holding Company Act's impediments to competition and to repeal the Public Utility Regulatory Policies Act, establishing in its place a federal policy for renewable technologies "compatible with a competitive industry."

The FERC chair supports efforts by the North American Electric Reliability Council to take the lead on reliability. "But the reliability rules of the road are not well defined. There are no effective programs of enforcement for making sure everyone plays by the same rules (em and for ensuring all industry segments are involved in setting these rules. Reliability in a competitive environment is too important to be left to a voluntary regime."

Mississippi Commissioner Curt Hebert, also testifying before the panel, disagreed with Moler: "I submit to you that competition must bring lower prices and more reliability.