The SPEAKER pro tempore. Under the Speaker's announced policy of January 19, 1999, the gentleman from Florida (Mr. STEARNS) is recognized during morning hour debates for 5 minutes.
Mr. STEARNS. Mr. Speaker, deregulation of the airlines, natural gas, railroads, telecommunications, and trucking industries yields annual savings equal to nearly 1 percent of America's gross domestic product. This Congress, we will attempt to craft a measure that will finally and successfully unleash competition and savings from utility reform, electric deregulation.
In recent years, competition has replaced regulation for the electric power industry in a number of nations, including the United Kingdom, New Zealand, Norway, Chile and Argentina. Many took a very long-term approach to this process. The United States faces a unique situation in that our electric power industry is largely already privatized. So we must focus on alternating our current system and effectively fostering more competition.
This should not be done through a Federal mandate. Clearly, we would be wise to make the State-mandated restructuring more efficient instead of imposing a separate Federal mandate. I see the ideal measure as one that fosters competition, avoids Federal mandates and lowers rates for all consumers. To create this legislation, we must eliminate outdated laws, inject fairness into the process, and delineate the proper roles of the Federal Government and State governments. But do not misunderstand me: Reforming the electric industry is no simple matter. This is an enormous undertaking. Congress considers the livelihoods of entire industries constitutional questions and the interests of the entire rate-paying public in addressing this very complex issue. Accordingly, we must address these points to fully realize the benefits of energy reform. Every consumer must benefit from this deregulation, not just the large industrial users of electricity. I am concerned that any
We must honor past regulatory schemes and commitments and allow recovery of stranded investments. Electric utilities incurred ``stranded costs'' under a regulatory scheme not of their choosing. These utilities made long-term decisions based upon decades of regulation. To deny industry the recovery of these costs would go against the fairness I spoke of earlier. That being said, lower costs should be fostered by real deregulation and industrial and regulatory innovation, not by simply shifting costs. We should not merely ``reshuffle the deck'' to see who pays.
A significant hurdle to deregulation is the diverse nature of power generators, including public power providers, municipalities, investor-owned utilities, and power marketing associations. Reconciling these disparate views will be a monumental task, yet fairness demands that we produce a level playing field for all energy providers and transmitters.
So reforming the energy industry on a Federal level demands clarifying, simply clarifying the roles of the Federal and State governments. Where does the Federal responsibility end and the States' begin? The diverse situation among the States adds to these reform difficulties. Some States have always supported regulation, others have taken progressive stances, while still others, like my home State of Florida, enjoy the benefits of moderately priced electricity and see little need for major reform.
Eliminating the barriers to entry into the electric market is fundamental to this reform. We must repeal the Public Utilities Regulatory Policy Act, PURPA, and the Public Utility Holding Company Act, PUHCA, to ensure that any transition to retail competition is truly competitive. The entire efficacy of PURPA centered on the supposition that producing electricity would become more expensive. In fact, Mr. Speaker, it has become cheaper. Thanks to PURPA, Americans will pay $38 billion in higher electric bills over the next 10 years than they should.
Deregulation of the electric industry requires consideration of a myriad of factors. The stakes are very high, but so are the benefits. To that end, I am introducing today a piece of Federal legislation that will change all that. It is called the Electric Energy Empowerment Act of 1999. It will not mandate the States to act, but instead will empower and encourage them to enact measures providing these customers retail competition and choice.
My legislation amends the Federal Power Act to clarify jurisdictional boundaries between state and federal authorities, thus empowering the states to enact competitive retail electricity markets. As an incentive for the states to move forward, the legislation includes a reciprocity condition. Further, the legislation eliminates the existing federal barriers to competition: it encourages the establishment of independent transmission system operators, and it deregulates the wholesale market by making the FERC wholesale open access rules applicable to non-jurisdictional entities.
I think everyone will agree that we are inevitably moving toward an electricity industry based on competition, market force, and lower rates. This is certainly my goal as I introduce this legislation today.