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July 27, 2001 LPPC Weighs In On Pending Energy Legislation "The LPPC supports the enactment of comprehensive legislation that promotes a competitive, efficient wholesale power market that benefits all consumers," Morris stated." We believe that there is a need for a comprehensive energy strategy, which addresses market concerns, promotes fuel diversity, promotes energy efficiency and conservation, and encourages environmentally responsive behavior." Mr. Morris told the Subcommittee that the LPPC believes that "…federal protections are necessary to ensure a level playing field for electric consumers and producers and to promote effective and sustainable competition." While supporting increased competition through restructuring, Mr. Morris advocated several measures to ensure both fairness in the marketplace and for consumers. "Federal legislation should ensure that a mechanism is in place to protect against anti-competitive concentration of generation ownership and against abuse of market power. This is particularly true if consumer protection laws such as the Public Utility Holding Company Act (PUHCA) are repealed. We believe eliminating this law without updating the Federal Power Act (FPA) would harm consumers." Mr. Morris also told the Committee that "legislation must resolve the 'private use' tax issue and should recognize the distinct nature of public power and its contribution to the electricity industry." "Without resolution of current tax restrictions relating to private use, restrictions on tax-exempt bonds could (1) prevent public power from fully opening up its transmission and distribution systems for use by investor-owned utilities; (2) could prevent our participation in Regional Transmission Organizations (RTOs); (3) constrain our ability to make long-term sales of surplus power." Mr. Morris also urged the Subcommittee to remove "the many statutory impediments to a competitive wholesale power market in the Tennessee Valley and bring that part of the country in step with the rest of America." He urged the Committee to repeal the TVA fence and the anti-cherry picking provision of the Energy Policy Act. The LPPC spokesman went on to state the organization's support of open transmission access. "FERC-lite, as included in the subcommittee's bill in the last Congress, is part of such open access. It would require public power entities to provide transmission services at rates that are not unduly discriminatory and require the company's non-rate terms and conditions to be comparable to those required of the investor-owned utilities." While encouraging some level of federal oversight of the transmission system, Mr. Morris made it clear that LPPC did not favor expanding FERC's jurisdiction to transmission ratemaking. "The LPPC does not support unnecessary expansion of FERC transmission jurisdiction. The LPPC strongly opposes extending full FERC ratemaking jurisdiction to our public power systems. In addition, we do not believe that FERC jurisdiction needs to be expanded to cover the transmission component of our bundled retail sales, as some of the members of the Committee have proposed." LPPC feels that if publicly owned utilities were to be forced to participate in RTOs, the result would be higher rates for ratepayers in their service area. The Large Public Power Council's membership includes 22 of the nation's largest community owned and operated electric systems. Mr. Morris is also the President and CEO of Memphis Light, Gas and Water Division. ###
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