A U.S. House-Senate conference committee may remove a provision in present law that requires the Department of Defense (DOD) to buy electricity solely from its local distribution company. The House of Representatives has already voted DOD (300 to 126) the right to buy electricity from the most economical source. A first step toward allowing retail wheeling for military bases, the provision is part of the House fiscal year 1996 Defense Authorization bill. However, it does not appear in the Senate's authorization bill; intense lobbying on both sides of the issue has given the provision a life of its own.
Since passage of the 1984 Competition in Contracting Act, DOD has been required to purchase goods and services on a competitive basis. But a 1988 appropriations bill made an exception for electricity purchases. That exception was inserted with no hearings.
A broad-based coalition of independent energy producers, cogenerators, alternative and renewable electricity producers, industrial users, and consumer advocate groups have joined together to urge lawmakers to approve the reform.
"Department of Defense is the largest purchaser of electricity in the United States, spending nearly $2 billion per year," said David L. Sokol, chairman of the board and CEO of California Energy Co., Inc., a leading proponent of reform and a member of the reform coalition. "According to the Office of the Deputy Assistant Secretary of Defense, Economic Reinvestment and Base Closure, a recent study done for the Air Force suggests that the Department of Defense could save between $95 to $235 million annually if allowed to competitively procure its electricity, as many cities and municipalities are already doing now."