State utility commissioners have gone on record asking Congress to "call them first" before it legislatively restructures the electric industry.
That resolution prompted some of the liveliest debate at the National Association of Regulatory Utility Commissioners' (NARUC) Winter Committee meetings. About 1,000 people attended the 10-day event in Washington, DC, February 21 to March 1.
NARUC's carefully worded "straw man" resolution (em nicknamed by certain commissioners who believe it carries little weight (em notes that the Federal Energy Regulatory Commission (FERC) has yet to act on its Notice of Proposed Rulemaking on open transmission access (Mega-NOPR). Some NARUC officials feel the Mega-NOPR could resolve as much as 90 percent of the policy Congress might tackle. The resolution's last paragraph was the most contentious:
"State experimentation and analysis of retail issues is ongoing, and because FERC's policies affecting wholesale markets have not been implemented, the 104th Congress should not enact legislation at this point which would impose a single approach that may ignore the differences in state and regional circumstances, or which preempts or interferes with state authority to adopt and implement policies for retail service."
The paragraph prompted this comment from Robert W. Gee of the Texas Public Utilities Commission, NARUC's Electricity Committee chair: "This language, obviously, was language we spent the most time on. . . . I think one can argue that we are attempting to send a positive message to Congress, with some caveats."
"We're not saying 'Don't enact or consider legislation.' We just don't want a single-state approach," said John Gawronski, NARUC's assistant director of congressional and public relations.
Others were more critical. Bob Anderson of the Montana Public Service Commission felt the resolution set a negative tone. Daniel Wm. Fessler of the California Public Utilities Commission called a draft version "a diplomatic flowergram." Commenting on the same draft, Duncan E. Kincheloe of the Missouri Public Service Commission complained, "I think this will be read as 'butt out.'"
NARUC also came out in favor of the FERC's tougher merger standards for electric utilities, and resolved to comment in the FERC's merger policy docket. Gawronski said he was uncertain what comments NARUC would file.
The NARUC Communications Committee proved the antithesis of the Electricity Committee. After little debate, commissioners pledged to work with the Federal Communications Commission (FCC) on the new Telecommunications Act of 1996.
Susan Ness, an FCC Commissioner, championed the Act for creating a national structure with flexibility for states, the "laboratories of competition." She added that Congress took steps in telecommunications because of the groundwork performed by lead states. "We must not let the industries play us off each other to delay competition or to gain [their own] advantage," Ness cautioned.
"We eagerly intend to cut and paste from what you've done," Regina Keeney, FCC common carrier bureau chief, told regulators. Keeney, who said that half of the 80 rulemakings coming out of the Act will take place in the common carrier bureau, invited regulators to submit their suggestions "fast and furious."
One communications resolution passed by NARUC strongly urged the FCC not to preempt state regulators in intrastate, fixed, wireless communications services. NARUC maintains that a fixed wireless service is a local loop that falls under state regulatory jurisdiction.
"This may go to the heart of the regulation of the local loop, and that is whether a fixed wireless loop is in fact a wireless service to be regulated at the federal level or a local loop to be regulated at the state level," said Lisa Rosenblum of the New York Public Service Commission, chair of the communications committee.
Environmental concerns also made the agenda, generating a resolution to work with environmental regulators. "It seems clear that if you are restructuring the industry, you are going to have both environmental impacts and economic impacts," said Ron Eachus of the Oregon Public Utility Commission. "And you need to consider both of those. And there needs to be some . . . coordination done between the economic regulator and environmental regulator."
On another environmental track, Kurt Yeager, Sr. (em vice president and chief operating officer of the Electric Power Research Institute (EPRI) (em told the Electricity Committee that the industry must give some thought to research and development (R&D) left stranded under restructuring. A third of EPRI's program funds, $150 million, is earmarked for research on environmental health and safety, renewable and advanced power generation, efficiency improvements, leading-edge technologies, transmission technologies, and electric vehicles.
"If [they're] not totally stranded, [they] are increasingly being stranded or being subjected to being changed from what I would call a public good set of objectives," Yeager argued. He said the largest concern was not whether EPRI would survive, but whether the industry/EPRI partnership would continue under the R&D framework established 25 years ago.
Gas Research Institute (GRI) representatives also spoke with NARUC about funding. GRI won support for "band-aid" funding to carry it through January 1, 1998. Decontracting and discounting have made it impossible for GRI to fund its entire FERC-approved $218-million program for 1996. The NARUC resolution urges the FERC to give GRI a stable funding base. Living up to its current funding mechanism could cause GRI revenues for 1996 to fall below $160 million. t
Joseph F. Schuler, Jr. is associate editor of PUBLIC UTILITIES FORTNIGHTLY.
How the Wind Blew...
On Electric Restructuring:
"The 104th Congress should not enact legislation at this point which would impose a single approach that may ignore the differences in state and regional circumstances, or which preempts or interferes with state authority to adopt and implement policies for retail service."
On the New Telecommunications Act:
"We eagerly intend to cut and paste from what [the FCC has done.]"
On Environmental Concerns:
"It seems clear that if you are restructuring the industry, you are going to have both environmental impacts and economic impacts. And you need to consider both of those. And there needs to be some... coordination done between the economic regulator and environmental regulator."
Heard at the NARUC winter committee meetings.
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