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April 11, 2000 LPPC Says S. 2098 is Useful Starting Point,
but Needs Tailored Washington, D.C. — "S. 2098 [The Electric Power Market Competition and Reliability Act] provides a useful starting point for comprehensive restructuring legislation," said William R. Mayben, President and CEO of the Nebraska Public Power District, in a statement before the Senate Energy Committee. Speaking on behalf of the Large Public Power Council (LPPC), Mayben stated LPPC strongly supports the establishment of legally enforceable reliability standards. He emphasized, however, that the bill needs to 1) properly tailor FERC transmission jurisdiction to the legal and financial constraints on public power; 2) ensure market power and merger protections for consumers, and 3) retain the appropriate level of flexibility for FERC as it approves new Regional Transmission Organizations (RTOs). \ Mayben raised concerns with provisions of S. 2098 that bring public power transmission under the same FERC authority that applies to investor-owned utilities. AA rigid overlay of FERC regulations designed for investor-owned utilities . . . is unworkable for public power systems," said Mayben. He suggested giving FERC authority to require that public power transmission systems offer open access transmission services at non-discriminatory rates. Mayben emphasized that S. 2098 lacks adequate market power and merger protections. He indicated that the LPPC "will be unable to support a bill that lacks an appropriate mechanism to address market power." Mayben also stated that the bill would limit FERC's ability to ensure that RTOs meet FERC's criteria under Order No. 2000, including standards of independence. "We support the flexible framework . . . established under Order No. 2000. We do not believe that legislation to place limitations on FERC"s authority is necessary or prudent during this formative period," said Mayben. On private use relief, Mayben thanked Senate Energy Committee Chairman Frank Murkowski (R-AK) and Senator Slade Gorton (R-WA) for their letter of March 23, encouraging LPPC, APPA and EEI to resolve differences on restructuring-related tax law. "We appreciate your continued leadership on these issues, and hope for your assistance as we turn to the jurisdictional tax committees," said Mayben. Private use restrictions on tax-exempt bonds could prevent public power systems from fully opening transmission and distribution systems for use by investor-owned utilities. ###
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