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January 18, 2001 Large Public Power Council Says New "Private Use" Temporary "Temporary 'private use' regulations issued by Treasury improve modestly upon the regulations currently in place, but do not go far enough to enable us to participate fully in regional transmission organizations or provide our consumers with competitive benefits," said Walter Bussells, chairman of the Large Public Power Council (LPPC). The IRS released the long-anticipated "private use" regulations for public power January 17. The regulations, however, were issued as three-year temporary regulations rather than in permanent form, as LPPC had urged. The new regulations were needed to replace temporary regulations issued in 1998 that were set to expire January 21. Without these temporary regulations, a public power system would be unable to offer use of its transmission lines to a private company for delivering power. "We are pleased the regulations did not expire. This would have created regulatory chaos for us," said Bussells, Managing Director and CEO of Jacksonville Electric Authority. "We had hoped, however, that the IRS would consider our consumers by issuing permanent regulations and permitting us to be full participants in the changing marketplace. "Although we are generally pleased with the changes made, we had hoped that more of the kinds of changes that public power requested would have been adopted." A bill to fully modernize the tax code to enable competition for both public power systems and investor-owned utilities was introduced in the last session of Congress. The bill — the Electric Power Industry Tax Modernization Act — received broad support last year, and the LPPC supports its enactment in this session. "We are urging Congress to consider the legislation this year as an important step in the process of creating workable, equitable power markets nationwide," said Bussells. ###
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