Chicago (Platts)--31Mar2009

Two commissioners from the US Federal Energy Regulatory Commission late
Monday outlined potential issues with key power initiatives on CO2 emission
reduction and transmission planning now before Congress.

FERC commissioner Philip Moeller said at the Platts 2009 Wind Power
Development conference in Chicago that he believes that if Congress tries to
"lump together" issues including a national renewable portfolio standard,
transmission siting and a cap-and-trade program to reduce CO2 emissions, it
could end up taking several years of debate to pass a cap-and-trade program.

He added that given the economic climate, global warming is a "very
difficult public policy to debate."

Moeller said that in the absence of a clear carbon policy, certain
regions of the US will rely more on wind and natural gas generation.

FERC commissioner Suedeen Kelly addressed proposals before Congress to
build more transmission, one pushed by Senator Harry Reid of Nevada and the
other by Senator Jeff Bingaman of New Mexico, both Democrats. While there are
subtle differences between the two bills, both would fundamentally change how
FERC determines cost allocation for new electricity transmission.

Kelly said that traditionally FERC assigns the cost of transmission to
the beneficiary who uses the power.

She noted that with renewable energy, especially with remote wind
generation, it is now more difficult to define who the beneficiaries are.

FERC may have to begin to explain benefits not in terms of supplying
power to an individual rate payer, but also through more general benefits such
as improving the environment.

Kelly warned though that if either the Reid or the Bingaman bills are
passed, FERC "will see a big change. We are into some interesting times."