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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

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
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