06-03-2000
ENERGY: What They Agree On
It's often said that Congress passes legislation only when facing a crisis
or a consensus. With that in mind, two groups of electricity deregulation
advocates have been working on separate compromise proposals that they
believe could serve as a road map for Congress. If legislation to
restructure the American electricity industry doesn't make progress, the
groups say, their principles would be ready in case the nation experiences
serious power outages this summer and Congress needs ready
solutions.
The two pro-deregulation groups were formed independently; one by the
MidAmerican Energy Holdings Co., an Iowa-based utility, and the other by
the Energy Department. Both groups include representatives from utility
companies, independent electricity generators, industrial energy users,
publicly owned electric companies, and consumer groups. The MidAmerican
group also includes representatives of the electrical workers' union. Both
groups endorse these points:
* Repeal the 1935 Public Utility Holding Company Act, which limits the
business activities of electric holding companies.
* Repeal the 1978 Public Utility Regulatory Policies Act, which requires
utilities to buy electricity from alternative energy sources. Both groups
would preserve existing contracts for power purchased under that
law.
* Give the Federal Energy Regulatory Commission broad authority to govern
electricity transmission in all states, whether they have deregulated
their retail electricity markets or not. The MidAmerican group has also
specified that monopoly utilities be allowed to reserve enough
transmission capacity to serve their local customers.
* Allow FERC to encourage companies that have transmission capability to
join regional organizations, which could ensure that transmission
companies provide the same terms and conditions to all seeking to ship
electricity.
* Authorize the North American Electric Reliability Council, an industry
oversight group, to draft and enforce mandatory transmission reliability
standards.
* Address the federal tax law that says publicly owned power companies
can't sell power outside of their service areas using power plants and
electric lines built with tax-exempt bonds.
* Let stand state laws that allow retail competition, as long as those
laws were enacted before the federal bill takes effect.
The two groups set aside a number of issues they couldn't agree on, such
as how Congress should treat the Portland, Ore.-based Bonneville Power
Administration and the quasi-governmental, Nashville-based Tennessee
Valley Authority, which dominate their respective regions. Nor could they
decide if they should make it a requirement for companies that sell
electricity to buy energy from environmentally benign sources, such as
wind, solar, and biomass facilities-a proposal that's being pushed by the
environmental community and was included in a 1999 Clinton Administration
package.
Margie Kriz
National Journal