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Electric Restructuring Legislation: Handicapping the 106th Congress

Fortnightly Magazine - February 1 1999

a Notice of Intent to consult with the states (Docket No. RM99-2- 000). At these meetings, state regulators will be asked where boundaries should fall and what their role should be in governing RTOs. (At least two commissioners, Vicky A. Bailey and Linda K. Breathitt, have criticized the NOI, questioning the FERC's authority.)

Besides the FERC's plans to meet with state regulators in January and February, low-cost states are becoming more vocal on restructuring.

Some 23 state commissions wrote to Congress in early December asking the elected body to let states decide individually if and how they should restructure their electric power markets. Regulators from such states as Virginia, Alabama and Utah said the average retail cost of electricity within their borders is 5.52 cents per kilowatt-hour, or 24 percent below the national average.

Some 18 states, including four "low-cost states," have restructured, or plan to restructure, electric power markets. Those states represent about half the country's population. Yet, according to the "Low Cost Electricity States Initiative," two-thirds of the country pay electric rates below the 1996 national average of 6.87 cents per kWh.

There are those, however, who believe federal legislation will matter.

"There's momentum for legislation," says one Hill observer. "I think with the two state referendums going down [Massachusetts and California], I think that pushes the momentum. I think there's a lot more room for piecing a bill together where you can coddle support, grow a coalition of support around. It all depends. On the House side, if Mr. Bliley does not advance a federal mandate bill, there's a strong possibility of things moving rather swiftly."

Deja Vu? Senate Bills

Evaluating last year's legislation proves a good starting point in determining what will and won't surface in this year's Congress.

Besides action by senators Murkowski and Bingaman on the Senate side, key bills may be introduced by Jim M. Jeffords (R-Vt.), Craig Thomas (R-Wy.), Slade Gorton (R.-Wash.) and Don Nickles (R-Okla.).

Murkowski and Bingaman are said to have a desire to work together.

"Based on what Chairman Murkowski has said, the approach of the Bingaman bill took on a lot of the FERC-related issues and he's supportive of that, so you may very well see large chunks of the Bingaman bill being incorporated into what Chairman Murkowski is doing," says a Hill source.

Not expected to resurface are the Public Utility Holding Company Act (S. 621) repeal bill and Public Utility Regulatory Policies Act amendment (S.2419). Both had been offered by Alfonse M. D'Amato (R-N.Y.), who was not re-elected. According to a legislative assistant to Sen. Phil Gramm (R-Texas) - who is expected to take over D'Amato's Banking, Housing and Urban Affairs Committee chairman's seat - Gramm hasn't determined whether he will float either bill again.

"Gramm has been rumored for a long time to be ruminating over his own restructuring bill, reportedly a year or so ago drafting one, but [his staff] demurred on that," says Joe Nipper, associate executive director at the American Public Power Association. "I don't think he's likely to introduce stand-alone pieces like [S.621