May 14, 2009

Senate Debates Extent Of Federal Authority In Power Grid Bill

On Wednesday, the Senate committee on Energy and Natural Resources met to begin voting on amendments to an older bill that will allow the federal government to quash state objections to expanding the national electricity grid.

If passed the amendments would provide states one year to find and submit appropriate sites for "Ëœhigh-priority' federal transmissions projects.  Should the states fail to decide on a particular location or refuse to accept the terms of the proposed development projects, the Federal Energy Regulatory Commission would then be authorized to step in.

The committee has adopted a measure first proposed by Senator Bob Corker, a Republican from Tennessee, that would block the FERC's ability to distribute costs associated with the project that are not "reasonably proportionate to measurable economic and reliability benefits" for affected regions.

"I don't think that customers that don't benefit in some way in another region ought to be paying for something that's occurring in a different region," stated Corker plainly.

Opposing Corker's proposed measure was the committee's chairman Jeff Bingaman, who argued that many of the benefits gained from new power lines "“ such as improved reliability of the grid "“ are not easily measured by standard financial indicators.

"This provision would make rolling costs in over a wide area nearly impossible "¦ This probably means that costs would only be allocated to purchasers of power," said Bingaman.

The committee has also been fiercely debating whether the FERC should have the authority to exercise eminent domain which would allow the federal agency to seize privately owned land that it judged as necessary for new power lines.  Senate Democrat Robert Menendez of New Jersey has proposed an amendment to eliminate the clause from the legislation that would have allowed the FERC practice eminent domain.

Senator Menendez' proposal was, however, rejected by the panel as was an amendment put forth by Republican Senator John Barrasso of Wyoming that would have prevented the FERC from seizing private property in states where more than 40 percent of the land is already owned by the federal government.

Senator Bingaman contended that any attempts to limit the FERC's power of eminent domain would have more or less "neutralized" the legislation.

Bingaman hopes to include the new bill as part of broader comprehensive energy package aimed at the establishment of a national renewable energy standard that would include measures such as tightening efficiency regulations for home appliances and dramatically increasing investments in clean energy sources.

The committee will continue holding hearings throughout next week to discuss further features of the legislation.  It remains unclear, however, if the panel will be able to reach a consensus on the full package before breaking for the Memorial Day holiday as they had previously hoped.


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