Press Release

Comprehensive Restructuring Must Resolve Private Use Issue;
Must Not Regulate State and Municipal Agencies As Private Corporations,
LPPC Tells House Committee

"The LPPC believes that any comprehensive restructuring bill must both satisfactorily resolve the private use issue and recognize that the federal government must not regulate state and municipal agencies as if they were private corporations," said William R. Mayben, President of the Nebraska Public Power District. Mayben, appearing on behalf of the Large Public Power Council (LPPC), gave testimony to the Commerce Committee's Energy and Power Subcommittee regarding Chairman Joe Barton's (R-TX) bill (H.R. 2944, the "Electricity Competition and Reliability Act").

Mayben applauded Chairman Barton for addressing the issue of "private use" restrictions in his bill. Current private use rules, which were put in place prior to the advent of a competitive electric industry, preclude many public power systems from opening their systems to full competition. "We believe, and are pleased that Chairman Barton agrees, that a fair and inclusive marketplace cannot exist without meaningful relief from private use restrictions." These restrictions also could result in higher rates for consumers. Mayben cautioned that for these reasons, "the LPPC cannot support federal restructuring legislation without private use relief."

Mayben also shared with the Committee LPPC's views on transmission policy. LPPC was the first group of transmission owning utilities to support open transmission access in debates preceding the Energy Policy Act. While Chairman Barton's bill supports the goals of open access, Mayben told the Committee that LPPC is concerned about provisions that give FERC the same authority over transmission rates charged by state and local utilities as it has over private corporations. "Such an expansion of FERC authority," he said, "is flawed policy." If additional FERC authority is needed, Mayben suggested it be limited to requiring that public power transmission utilities offer non-rate terms and conditions of transmission service comparable to those that investor-owned utilities are required to offer.

Mayben also voiced concern about a mandate requiring all transmitting utilities to join Regional Transmission Organizations (RTOs) without consideration of the difficulties that it poses for public power. Private use restrictions, provisions in state constitutions, state and local laws and bond covenants, he said, can all present barriers to participation in RTOs. Mayben asserted that "LPPC is unable to support any provision requiring public power systems to join RTOs unless the RTO is required to accommodate the unique characteristics and legal requirements of public power." He added that FERC should not require any public power system to join an RTO if the state in which that utility operates has chosen not to mandate public power participation in RTOs.

####

The Large Public Power Council (LPPC) is an association of the nation's 21 largest public power utilities. It serves millions of customers in some of the largest and fastest-growing areas of the country and counts some of America's biggest corporations among its customers.