The Bush administration’s energy plan revives a number of controversial legislative proposals favored by some in the electric power industry but that have also encountered stiff opposition in the US Congress.
The plans recommends US Energy Secretary Spencer Abraham propose comprehensive electricity legislation. Previous efforts have gone down in defeat. The Bush plan said the legislation should promote “competition, protect consumers, enhance reliability, promote renewable energy, improve efficiency, and reform the Public Utility Regulatory Policies Act.”
Included in the plan is a recommendation to repeal the Public Utility Holding Company Act (PUHCA), a change Omaha, Neb.-based Berkshire Hathaway Inc.’s largest investor, Warren Buffett, lobbied to include.
“Our primary investment partner, Berkshire Hathaway, has already signaled its willingness to invest more than $10 billion in our industry through MidAmerican [Energy Holdings Co.],” said Chairman David Sokol. He said retiring PUHCA will permit Buffett to invest in other utilities which he cannot do under PUHCA rules.
With transmission a key component to insuring the nation has access to competitively price electricity, the plan endorses legislation that would create a self-regulatory reliability organization subject to the Federal Energy Regulatory Commission.
Ellen Vancko, a spokeswoman for the North American Reliability Council (NERC), said the organization is pleased the plan supports a long-held NERC goal. Similar legislation is pending in congress, but Vancko said she hopes administration support will give it “impetus to move forward.”
Other transmission highlights include:
o The Federal Energy Regulatory Commission would be encouraged to use existing authority to promote competition and encourage investment in transmission facilities.
o The secretary of energy will look into expanding the department’s research and development on transmission reliability and superconductivity.
o The secretary of energy will authorize the Western Area Power Administration to explore relieving the Path 15 transmission bottleneck in California through a transmission expansion financed by nonfederal funds.
o By Dec. 31, the secretary of energy is to identify and report transmission bottlenecks and examine the benefits of establishing a national grid.
o The secretary of energy in consultation with other federal and state agencies is to develop legislation to grant authority to “obtain rights-of-way for electricity transmission lines” similar to authority held by natural gas pipelines.
o The secretary of energy and FERC are to work together to relieve transmission congestion with rate incentives.
o Federal power authorities, including the Bonneville Power Administration, would be directed to review the need to build transmission and, if necessary, the administration should seek an increase in BPA’s borrowing authority.
Thomas Kuhn, president of the Edison Electric Institute, Washington, DC, said the blueprint’s call for greater siting authority of high-voltage transmission lines by FERC is a step “that will help streamline the construction of badly needed power lines to keep pace with the soaring growth in wholesale electricity markets.”
The Electric Power Supply Association “enthusiastically” supports those recommendations that continue to promote electric competition and the elimination of jurisdictional red tape with regard to power plant and other energy infrastructure siting, said Lynne Church, president.
With respect to hydropower, Bush proposes FERC cut the time required to obtain licenses, while preserving environmental goals. That can be accomplished, according to the plan, by directing federal agencies to reach interagency agreements on conflicting mandatory license conditions, before they submit their conditions to FERC for inclusion in a license.
However, the Hydropower Reform Coalition said the administration’s hydro proposals are out of step with a rapidly growing number of river front communities who are discovering river restoration is the key to new economic prosperity through tourism and recreation.
“For many communities this includes efforts to remove dams that have outlived their usefulness and now do more harm than good,” said Matt Sicchio, coalition coordinator.