February 25, 2000
MURKOWSKI INTRODUCES ELECTRICITY DEREGULATION BILL
WASHINGTON -- Alaska Sen. Frank Murkowski late Thursday introduced major legislation to promote competition and to ensure reliability in the electric power industry.
³Competition isnıt the goal of this legislation. Instead, competition is the means to achieve the goal of assuring consumers a reliable and reasonably-priced supply of electricity,² said Murkowski.
While the bill generally is aimed at the more competitive electric industry in the Lower 48 states, Murkowski said the bill may need to contain a provision that could be of great benefit to rural areas, especially Alaska, one that would create a universal service fund -- similar to that which was included by Congress in the telecommunications legislation. Such a provision would help areas which do not have access to reliable and affordable electricity.
Some 24 states have already adopted some form of retail competition in electricity sales and all states are considering such a change. ³Our legislative task is to trim federal regulation down to the absolute minimum, but at the same time not halt state progress on retail competition or interfere with the Federal Energy Regulatory Commissionıs progress on bulk power market competition,² said Murkowski in remarks for redelivery on the Senate floor in introducing the bill.
The legislation in part:
Murkowski said a host of issues will need to be considered during the legislative process reviewing the bill. He said there is an important issue of streamlining the speeding up the FERC merger review process. ³Utilities rightfully are distressed that FERCıs process takes far too long and is much too cumbersome,² he said.
³Another controversial issue that we must deal with in the context of comprehensive legislation is the tax-exempt municipal bond issue, creating a level competitive playing field between investor-owned utilities and municipally owned utilities,² he said. Under the tax code, municipally-owned utilities can issue tax exempt bonds to build new generation, transmission and distribution facilities, but investor-owned utilities can not issue tax-exempt bonds for these purposes -- a disadvantage.
³But on the flip side -- under the tax code -- municipal tax-exempt bonds are to a private useı limitation. This means that if municipal utilities go too far in competing against private utilities, then their bonds are subject to retroactive taxation. This limits the ability of municipal utilities to compete in the market. The bottom line? We have a tax code that is not consistent with todayıs competitive environment, putting both municipal utilities and private utilities ar risk,² said Murkowski.
Finally, Murkowski, said resolving the role of the Federal Power Marketing Administrations, such as the Bonneville Power Administration, is important. ³We also need to address the role of one of the largest utilities in the United States -- the Tennessee Valley Authority.²