Senate power title lacks PUHCA repeal, offers participant funding

Washington (Platts)--16May2005

The US Senate Energy and Natural Resources Committee on Tuesday will begin
marking up its version of comprehensive energy legislation that contains an
electricity title that differs from the House of Representatives-passed bill
in key areas. 

Compared with the bill the House passed in April, the Senate draft title does
not include the repeal of Public Utility Holding Company Act, and does not cap
the budget of a new grid watchdog organization but does say the US Federal
Energy Regulatory Commission may consider participant funding to finance new
transmission. While the House bill would repeal PUHCA, disagreement exists
among Senators over whether additional consumer protections and merger
authority under FERC are needed if PUHCA is repealed.

The House decided against including its previous mandatory participant funding
language in its bill but the Senate draft title says that FERC "may approve"
such a plan that would spread the costs of grid upgrades or new generator
interconnection to those that benefit, regardless of whether they are members
of a regional transmission organization. The plan, according to the Senate
draft, must result in rates that are just and reasonable, consistent with the
Federal Power Act and not unduly discriminatory. 

Both House and Senate bills include plans to develop an electric reliability
organization to set and enforce grid standards, but the Senate version does
not cap its annual budget as the House bill does. Both bills also provide for
FERC to issue construction permits for new critical transmission lines under
certain conditions and contain language to codify utilities' protection of
their native load.

This story was originally published in Platts Electricity Alert
http://www.electricityalert.platts.com

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