Favoring a uniform federal mandate, but also a drawn-out transition period to let the industry "prepare" itself, Sen. Dale Bumpers (D-Ark.) has recently introduced federal legislation on electric industry restructuring with the admonition that new laws should assure benefits to residential consumers (em not just the large-load customers.
Bumpers, ranking Democrat, Senate Committee on Energy and Natural Resources, on April 7 addressed the American Gas Association's Natural Gas Roundtable in Washington, D.C., on electric restructuring, talking about his introduction of S. 237, the "Electric Consumers Protection Act of 1997."
He noted that he is not wedded to every provision in his bill, and said that changes would be made. Bumpers referred to the provision that now allows state commissions to order divestiture of generation, which he called a "draconian" measure, and assured that provision would change.
A Federal Mandate. Bumpers noted his bill's restructuring implementation date was Dec. 15, 2003. He said, "My bill provides for a federal mandate and I'm not going to apologize for that." He opted for a later date than most other proposed bills because he believes more time would allow the industry to prepare for the change better.
Bumpers said he felt that allowing each state to introduce restructuring on varying dates would have "unintended consequences." For example, it could lead to cherry-picking along state lines, plus a bevy of lawsuits attacking state policies for or against the recovery of stranded costs, or even the method of recovery. Bumpers added that his bill would not guarantee 100-percent recovery of stranded costs, but would allow recovery for those that were prudently incurred and mitigated.
Merger Review. The Bumpers bill also would give specific authority to the Federal Energy Regulatory Commission to review mergers between electric and gas utilities. He said the proposal was not popular among gas utilities, adding the same scrutiny as electric mergers receive. The bill would repeal the Public Utility Holding Company Act one year after enactment of S. 237, and replace it with expanded state commission and FERC authority.
Bumpers said Sen. Frank Murkowski (R-Alaska), the chair of the Senate Committee on Energy and Natural Resources, is "not as enthusiastic as I am about a bill," but Bumpers found it unlikely that a bill could be passed without Murkowski's support.
"I don't think Murkowski will bring my bill in for a markup," he said. Bumpers added that the Clinton Administration's restructuring bill is too deferential to the states. And he pointed to a "strange coalition" in the House of Representatives in which both liberals and right-wing Republicans support restructuring. The former supports it because it would help consumers; the latter because it would introduce competition.
Bumpers appears strongly opposed to having the private sector compete with firms that receive government subsidies. He emphasizes that any legislation must address issues concerning the Tennessee Valley Authority and the federal power marketing administrations.
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