After 40 years of wandering in the wilderness as a minority party, House Republicans are ready to slash and burn what they see as a bloated federal bureaucracy. The next two years will demonstrate just how powerful the legislative branch can be when both House and Senate are controlled by a strong-willed party on a mission. Electric industry officials seem optimistic, but cautious, about this Republican revolution. "We're all trying to read the tea leaves," said Patricia Schaub, director of federal governmental relations for Pacific Gas & Electric Co.
Republicans will spend their first 100 days focusing on the regulatory reforms in the "Contract with America." Next on their list is the fiscal 1996 budget resolution, due in mid-April, which will entail difficult spending decisions. Little else, including energy legislation, is expected to move very far until late spring. Industry officials believe they must complete their legislative goals, or at least make a good start, by the end of this year (em before Congress and the White House turn their attention to partisan politics and the 1996 presidential elections and early primaries.
Investor-owned utilities (IOUs) facing increased competition expect to find Congress sympathetic to their calls to repeal what they consider burdensome, restrictive regulations that thwart their efforts to compete. One example: repeal of the Public Utility Holding Company Act of 1935 (PUHCA). Ten of the nation's 14 registered public utility holding companies have written Senate Banking Committee chairman Alfonse D'Amato of New York, House Commerce Committee chairman Tom Bliley of Virginia, and others urging "prompt repeal" of PUHCA. They say the New Deal law is "antiquated, unfair, and unnecessary" in today's more competitive environment, where state regulators and the Federal Energy Regulatory Commission (FERC) have adequate resources to protect consumers. The Securities and Exchange Commission seems to agree with the holding companies, according to a "concept paper" that questions PUHCA's viability. One industry lobbyist says chances for repeal of PUHCA are greater than ever: "We're committed now to the cause of repealing [PUHCA]. We're moving down that road."
The Public Utility Regulatory Policies Act of 1978 (PURPA) is also likely to undergo reform, but it may be complicated by a push this year from a coalition of large industrials seeking Congressional help in implementing retail wheeling throughout the country. Many utilities and their lawmakers will resist the effort, arguing that the FERC has only begun to use its new authority to order wholesale transmission access, and that a more competitive bulk-power market should be in place first.
After the "Contract with America," one of the first priorities of the House and Senate energy committees will be to resolve the impasse over nuclear waste storage. Approximately 26 utilities have nearly exhausted their storage capacity for spent nuclear fuel, and the Department of Energy (DOE) has acknowledged that it will be unable to meet its responsibility to begin accepting spent nuclear fuel by January 31, 1998. DOE estimates that a permanent repository probably will not become available until 2010, but by then 80 generating plants will be out of storage space. Both Bliley in the House and Senate Energy Committee chairman Frank Murkowski of Alaska have said they plan to deal with the problem this year. A number of bills will be thrown in the hopper, but the working bill in the House, HR 1020, was introduced by Rep. Fred Upton (R-MI), member of the House Commerce Committee. Sen. Bennett Johnston (D-LA) has introduced his own bill in the Senate.
The IOUs may find that many of their goals will coincide with the Republican effort to streamline government and ease the regulatory burden, but it's looking like a difficult year for public power. Even President Clinton has given public power reason to worry, recommending in his fiscal 1996 proposed budget, released at the start of February, that four of the five federal power marketing administrations (PMAs) should be privatized. Clinton's proposed budget recommends selling the Alaska Power Administration, the Southeastern Power Marketing Administration, the Southwestern Power Marketing Administration, and the Western Area Power Administration (em raising about $3.7 billion. The Administration also will send up legislation this year to turn the Bonneville Power Administration (BPA) into a government corporation. However, a number of Republicans still have Bonneville on their hit list for an outright sale. Rep. Scott Klug (R-WI) has introduced a bill, H.R. 310, that would direct DOE to sell all five PMAs. Rep. John Kasich (R-OH), now chairman of the House Budget Committee, called for a similar firesale in his alternative budget last year.
The American Public Power Association (APPA) is greatly concerned about the future of public power, and plans to lobby Congress to reject any sale, transfer, lease, or other change in the PMAs. Ted Coombes, APPA director of government relations, is cautious: "The only thing I will predict is we have a big fight ahead of us." APPA is counting on the Senate to block any sales. Coombes noted that both Senate Appropriations Committee chairman Mark Hatfield (R-OR) and Senate Majority Leader Bob Dole (R-KS) have strong ties to public power. Dole helped bring public power to Kansas. As for the House: "It looks like that train is leaving the station," Coombes said.
There is the potential for considerable tension to emerge this year between public and private power. As Congress looks to new sources of revenue to fund its $200-billion "Contract with America" provisions, APPA is concerned that public utilities may lose their tax-exempt status for bond financing, which the IOUs contend gives public power a competitive advantage. IOUs have expressed concern that regulatory reform called for in the "Contract" could create an uneven playing field for the public and private sectors, by imposing requirements on the private sector but exempting public, or municipally owned, companies.
In other areas, Congress will try again to pass telecommunications reform, take up reauthorization of Superfund and the Endangered Species Act, revisit environmental mandates in the Clean Air Act, reorganize DOE, and slash funding for many energy programs. Congress also plans to implement regulatory reform measures such as risk-assessment legislation requiring greater cost-benefit analysis for new rules and regulations, which could benefit coal-fired power plants and nuclear plant operations.
Overall, Congress will set the agenda for the next two years, not the Clinton White House. t
W. Lynn Garner is senior writer of PUBLIC UTILITIES FORTNIGHTLY.
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