Advocate Summary

Issue:  PURPA repeal
Advocate:  Edison Electric Institute – Kathy Steckelberg
Date of Interview: 8/6/02

Basic Background
Basically our primary objective with PURPA is to repeal the section 210 mandatory purchase obligation, protecting existing PURPA contracts and then also assure the recovery of PURPA costs to our member companies, make sure that they can collect the costs from those higher priced PURPA contracts that they were required to have, so that’s our legislative objective to try and do that. 

Prior Activity on the Issue 
We’ve been working for a number of years that would accomplish those objectives in electricity bills that have been introduced in Congress. 

Advocacy Activities Undertaken
Now that we’ve got the Energy Bill moving through Congress that’s got an electricity bill in there, there’s some of what we want in that PURPA provision but not everything that we wanted. Unfortunately the provision was modified on the Senate floor in a way that we don’t like, so one of the things we’ve been trying to do as the bill has been going through conference is trying to get it modified somewhat, so that’s basically what our PURPA goals are. We’ve been dealing with members of Congress that have an interest in the issue, members who are impacted by it. When the states have implemented PURPA some of them have done it in such a way that it has had fairly minimal impact on consumers because the contracts were priced more at market rates. Other states set the cost for PURPA very high and so in those states consumers tend to have paid above market prices for PURPA contracts, some of those states would be California, New York, Florida, Pennsylvania, New Jersey. So we’ve been working with members of Congress who have an interest in this for example some of the Florida members, Congressman Cliff Stearns (R) who’s been a major sponsor of PURPA legislation now for years, we’ve worked with them to get the legislation introduced and to champion it and ask questions at hearings about PURPA and things like that. So we worked with those members to get the legislation introduced, get letters written to other members, letting them know about the problem, getting co-sponsors for the bills, try to make sure it gets into an electricity bill that moves, that starts to move through the legislative process, and we are now working with those members to try to get the PURPA language in the electricity title fixed.  

Future Advocacy Activities Planned
[No specific activities mentioned – will continue to work on the Energy bill as it goes through conference]

Key Congressional Contact(s)/Champions
Other states set the cost for PURPA very high and so in those states consumers tend to have paid above market prices for PURPA contracts, some of those states would be California, New York, Florida, Pennsylvania, New Jersey. So we’ve been working with members of Congress who have an interest in this for example some of the Florida members, Congressman Cliff Stearns (R) who’s been a major sponsor of PURPA legislation now for years, we’ve worked with them to get the legislation introduced and to champion it and ask questions at hearings about PURPA and things like that.

Targets of Direct Lobbying
Obviously if we’re talking about trying to get co-sponsors we’re going after members from states where PURPA has been a problem, unless for just philosophical reasons someone just thinks PURPA is a lousy idea, you tend to go after members of congress where they’ve had a problem because if they are going to be more sympathetic, typically – not always, and so the arguments resonate better with those folks. So those tend to be the members that we go after first. 

Targets of Grassroots Lobbying
None mentioned.

Coalition Partners: Names/Participants
There was a group called the PURPA Reform Group which is made up of a number of our member companies who are particularly interested in the PURPA issues. Because the states have implemented PURPA differently, it hasn’t impacted all of our companies the same, so for some PURPA repeal is just not a priority at all because they don’t have a problem with it, for other companies because of the way the state implemented it – it’s been a big problem. So we have a group of our member companies who are most interested in it and we’ve put together a coalition the PURPA Reform Group and they’ve basically hired some of their own consultants and PR people and we tend to meet every week and that’s really been sort of the group that organized the whole effort. If you are doing something on PURPA you really need to talk to Randy Davis or Linda Stunts who are over at a law firm and they are the consultants for the PURPA reform group and spend copious amounts of time pondering PURPA, so just don’t think you could do a really good job on PURPA without talking to one or both of them. 

Other Participants in the Issue Debate
Well we’ve got the local utilities that are having to pay – that are being forced into these contracts on one side and then on the other side of the debate tends to be the groups that benefit from PURPA, they tend to be industrial facilities that are using co-gen and actually have the qualifying facilities that are getting paid. They tend to be chemical facilities, they tend to be co-gen facilities attached to paper mills, you tend to have just pure PURPA machines, they were sort of energy facilities built specifically to take advantage of PURPA, but a lot of times PURPA facilities tend to be by-products of industrial facilities. 

Ubiquitous Argument(s) and Evidence
We’ve primarily been arguing that PURPA basically has failed in its objective. PURPA was designed to promote diversity in fuels, for example on of its objectives was to bolster renewable energy resources, it’s done a dismal job of that – most PURPA facilities are not using renewables. We’ve also talked primarily about the cost to consumers about PURPA. The PURPA contracts are probably costing consumers about 8 billion dollars in above-market prices every year. At one point in time when we were getting more cost information from our companies before the electricity market got competitive, we estimated PURPA was probably costing 36 to 40 billion dollars in higher electricity prices, and so that’s simply money that consumers just don’t need to be paying for these contracts. Being obligated to enter into a contract that is above market price in a competitive wholesale market makes no sense in this environment. I mean, we’ve gone to competitive wholesale markets, these PURPA facilities have the ability to reach out and find buyers and the local utilities shouldn’t be held captive to buying power they may not need at above market prices when all that’s going to happen is that consumers wind up paying higher electricity prices. So that’s basically the message we’ve been delivering; PURPA is not achieving its objectives but what it is doing is it’s costing consumers more in their electricity bills. 

Secondary Argument(s) and Evidence
None mentioned.

Targeted Arguments, Targets, and Evidence
Obviously if we’re talking about trying to get co-sponsors we’re going after members from states where PURPA has been a problem, unless for just philosophical reasons someone just thinks PURPA is a lousy idea, you tend to go after members of congress where they’ve had a problem because if they are going to be more sympathetic, typically – not always, and so the arguments resonate better with those folks. So those tend to be the members that we go after first. 

Nature of the Opposition
Well we’ve got the local utilities that are having to pay – that are being forced into these contracts on one side and then on the other side of the debate tends to be the groups that benefit from PURPA, they tend to be industrial facilities that are using co-gen and actually have the qualifying facilities that are getting paid. They tend to be chemical facilities, they tend to be co-gen facilities attached to paper mills, you tend to have just pure PURPA machines, they were sort of energy facilities built specifically to take advantage of PURPA, but a lot of times PURPA facilities tend to be by-products of industrial facilities. We tend to find the industrials on the other side, because they have a great subsidy and they don’t want to give it up, nobody likes to give up a subsidy. So they’ve been making billions of dollars off the industry because of this, it is really, really easy because they know we have a must-purchase obligation, so they don’t have to try to sell their power on the market, they don’t have to find a willing buyer, they just call up the local utility and say I’m producing power right now and you have to buy it – it’s a great deal for them. 

Ubiquitous Argument(s) and Evidence Articulated by the Opposition 
Their arguments to Congress have generally been two fold. One, we ran into this when the amendment came up on PURPA, where they were basically arguing that they are currently a distressed industry - the paper industry is laying off a lot of people – and so that it would hurt them economically to get rid of PURPA. So the basic message was “to hell with the electricity consumers because we need this subsidy to keep your constituents employed.” Unfortunately it worked very effectively. The other argument that they’ve made is that it’s all fine and good for the utilities to say that we have access to a competitive market, but in fact it’s tough to reach that market so we should be able to continue to sell to the captive utilities. So when you press them on that argument they’ll be like “well we’d have to reserve transmission capacity, get our power out to the market” and we’re like “well yes, but so does everybody else” and then “well we don’t know when we are always going to need it” - “well that’s why we have intermittent transmission capacity” – “well it’s a hassle” is sort of the bottom line, well welcome to life. So those are the types of arguments they tend to make. So when the Senate was debating the Energy bill and this amendment came up to limit the ability to get out of having to buy this power, this was the one issue the industrials really focused in on they really threw a lot of weight behind the amendment and they were successful. It came up on a day where our industry had three amendments, three really important amendments up on the floor and we just ended up getting spread too thin, they stayed focused on one amendment and they won. That’s the way it goes some times. 

Secondary Argument(s) and Evidence Articulated by the Opposition
[See above two-fold argument]

Targeted Argument(s) and Evidence Articulated by the Opposition (and Targets)
None mentioned.

Described as a Partisan Issue
No.

Venue(s) of Activity
Senate 

Action Pending or Taken by Relevant Decision Makers
Energy bill is still in conference.

Policy Objective(s) and Support for/Opposition to the Status Quo
Opposed to the status quo, working to repeal PURPA.

Advocate’s Experience: Tenure in Current Job/Previous Experience
I started working at EEI November of 1988, and I’ve actually done a number of issues at EEI, when I first came I worked on nuclear issues, I’ve done energy efficiency, renewable energy, and then since basically since 1991 I’ve worked on what we call electricity restructuring issues – structure, federal power act, PURPA type issues. Before that I worked up on the Hill for about 8 years for a House member. 

Reliance on Research: In-House/External (Code for Organizational Advocates Only)
It really depends upon the project, we do some work in-house. For example we have a communications department so they can do a lot of writing, we’ve got a press department so they deal with our press releases. The research projects really depend upon what it is. We’ve not done a lot of research on PURPA of late, in part because as our industry has become more competitive our member companies are less willing to share price information and cost information with us, it’s proprietary information it can be used in a competitive marketplace so we’ve actually seen the impact of competition on their willingness to share information.

Number of Individuals Involved in Advocacy (Code for Organizational Advocates Only)
Ten.

Units in Organization Involved in Public Affairs/Policy (Code for Organizational Advocates Only)
We’ve got about ten lobbyists and we’ve got a couple of people who work pretty much with state and local groups, third party groups – that’s all within government affairs. Then we have the communications department, press department, general council’s office, we’ve also got a lot of staff that mirror our companies’ business operations, so we’ve got people that work on energy delivery, on transmission issues, retail energy issues, we’ve got folks on generation issues, international issues – we’re a fairly large trade association. We probably have now, probably over 200 employees here, this is our headquarters.  

Advocate’s Outstanding Skills/Assets (Code for Organizational Advocates Only)
None mentioned.

Type of Membership: None, Institutions, Individuals, Both (Code for Organizational Advocates Only)
Institutions – businesses

Membership Size (Code for Organizational Advocates Only)

Organizational Age (Code for Organizational Advocates Only)

Miscellaneous

Again, if you want to get into the gory details of PURPA, I strongly recommend you talk to Randy or Linda – Randy’s number is 662-6792. It’s Stern Davis, Staffier and something or another, I don’t remember law firm names they change so often.