Clinton rolls out federal electric restructuring bill
By Anne M Porter -- Purchasing, 6/3/1999
In April, the Clinton Administration sent to Congress its second attempt at obtaining comprehensive federal legislation on electric power industry restructuring. If enacted, the Administration's bill would:* Beef up the Federal Energy Regulatory Commission's authority to order open access to transmission wires and to regulate the way such access is priced and/or managed.
* Empower the ferc to create and delegate federal authority to regional transmission planning agencies.
* Empower the ferc to create and delegate federal authority to an electric reliability organization of its choosing (note: The North American Electric Reliability Council is pursuing this role).
* Clarify the ferc's authority to order formation of independent regional transmission organizations (RTOs).
* Give ferc the authority to order remedies where it deems that market power exists.
* Mandate that electricity providers use standard formats to disclose information on price and terms and conditions of service.
While setting a deadline (January 1, 2003) for retail choice to be implemented, the bill avoids creating a date-certain mandate for states to deregulate by allowing them to opt out of competition altogether.
Perhaps the most controversial aspect of the bill--the one most likely to sink it--would require power generators to convert 7.5% of their generation assets to renewable fuel sources (excluding hydropower) by 2010.
The Clinton Administration estimates that, if enacted, the bill would save consumers a minimum of $20 billion per year ($232 per year for a typical family of four) and reduce greenhouse gas emissions by 40-60 million metric tons in 2010 (through initiatives promoting investments in energy efficiency, renewable energy, distributed power, and combined heat and power technologies).
Thomas Kuhn, president of the Edison Electric Institute (representing investor-owned utilities) said, "At EEI, we like some elements of this bill, but we are deeply troubled by many others because they would add new and unnecessary layers of regulation." Among trouble spots, Kuhn cited the bill's attempts to "grant broad new authorities to ferc over the U.S. transmission system," plus "costly and unrealistic requirements for using renewable energy sources to generate electricity that ignore the important contribution of hydroelectric power."
Reacting to the filing, John Anderson, executive director of the Electricity Consumers Resource Council (elcon) representing large industrial end users said, "The Administration is to be especially commended for recognizing that electricity deregulation is not just about price. The Administration's plan includes very good language on electricity transmission, on grid governance, and on market power. These provisions must be included in a federal statute to guarantee that markets are open and truly competitive."
Lynne Church, executive director of the Electric Power Supply Association (epsa) said that while disagreeing with certain provisions of the bill, the organization is "excited about [the bill] because the Clinton Administration has taken quick and serious action on behalf of electricity customers all across the country." Nonetheless, Church said epsa "will continue to recommend the adoption of a specific, near-term date for the national implementation of retail electric competition, ensuring that no customers will be left behind."
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