DOE Pushes RTO Volunteerism in Federal Energy Bill

By Published On: October 15, 2003

It?s no surprise that the US Department of Energy is asking the House and Senate Energy Conference Committee holding hearings on bill HR 6 to rescind the Public Utility Holding Company Act and add last-resort siting authority for new transmission lines for the federal government. In a letter to the conference committee September 10, however, DOE added that regional transmission organizations should be voluntary?despite growing sentiment that RTOs would have at least prevented the communication problem that is blamed, in part, for the massive August 14 blackout in the eastern U.S. DOE was also curiously silent on whether the Federal Energy Regulatory Commission should proceed with its Standard Market Design. ?We think the PUHCA puts restrictions on who can participate? in investing in transmission projects, Spence Abraham, Energy Secretary, told Congressional members last week. PUHCA was passed in the 1930s to protect the public from ?evil? utility monopolies. In his letter, Abraham added, ?The administration strongly supports…options that would allow for increased rates-of-return on new transmission investments.? He said that includes a FERC mandate for incentive-based rates for investors as opposed to cost of service rates. DOE opposes a national renewable portfolio standard such as the one adopted for California utilities. However, Abraham said that the federal government should not prevent states from adopting California-like renewable supply mandates. Liquefied natural gas projects might get a boost if DOE?s recommendations for ?increased production of alternative and traditional energy resources on the outer Continental Shelf, as well as federal onshore lands and tribal lands? are taken. And, as to be expected, the administration is still trying to open up drilling in the Arctic National Wildlife Refuge. In its bid to expand the nuclear industry, DOE wants to see more federal money spent on nuclear research and development?most likely through the agency itself?although Abraham rails against other, non-nuclear, authorizations as ?excessive.? California forbids building new nuclear plants. DOE also supports language in earlier bills that would reauthorize the Price-Anderson Act that subsidizes insurance for the industry in case of accident.

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