House Republicans seek to frame energy debate with 200-page draft bill

Tuesday, March 04, 2003

House Republicans kicked off this year's congressional energy policy debate last Friday when Energy and Air Quality Subcommittee Chairman Joe Barton (R-Texas) released a 200-page draft bill that he called "the first step" toward passing comprehensive legislation this year.

Barton's draft appears to represent a bare-bones framework with many of the more controversial provisions left to be drafted, though it does include comprehensive electricity restructuring language and a title on automobile efficiency. More contentious matters, like drilling in Alaska's Arctic National Wildlife Refuge, ethanol mandates, renewable portfolio standards and tax incentives, were not listed in the summary provided by Barton but could be included at a later date.

Electricity regulation and reform may be the most aggressive push under the new bill. Undaunted by serial failures in the past to move power market restructuring provisions through Congress, Barton unveiled a sweeping electricity title that in some cases grants eminent domain for power line construction, gives states the ability to bypass federal land management agencies and increases the Federal Energy Regulatory Commission's jurisdiction over unregulated federal utilities.

Barton would grant FERC "partial jurisdiction" over the Bonneville Power Administration, the Tennessee Valley Authority and municipally owned utilities to give federal regulators more authority to move transmission-owning utilities toward regional transmission organizations (RTOs), as part of FERC's attempts to standardize market design and consolidate transmission management. The draft bill also assumes a desire by Congress for all utilities to voluntarily participate in RTOs and encourages FERC to grant incentives for their participation.

In contrast, a rival electricity bill introduced last week by another key figure in the debate, Sen. Craig Thomas (R-Wyo.), is far less aggressive, proposing as Barton does to repeal the Public Utility Holding Company Act but stopping short of the eminent domain and federal authority provisions. Thomas warned against trying to go too far with a power title, saying this year's energy policy bill should avoid "attempting new federal experiments that seek to fix what is not broken and would only compound the uncertainty plaguing today's electric industry."

On fuel economy for cars and light trucks, the bill does not advance an increase for the Corporate Average Fuel Economy (CAFE) program, continuing a cautious approach favored by leading House Republicans and some Democrats. The bill would only authorize an additional $5 million to help the National Highway Traffic Safety Administration implement and enforce federal fuel economy standards for model years 2004 to 2006, as well as direct the National Academy of Sciences to perform another study on the "feasibility and effects" of significantly improving fuel economy by 2012.

It also asks the National Academy to recommend alternatives to the current federal fuel economy law, which requires NHTSA to set annual CAFE standards for cars and light trucks.

A January 2002 NAS report concluded technology already exists that would allow automakers to significantly improve the fuel economy of their vehicles over the next 10 to 15 years without compromising safety, hurting the industry or penalizing consumers. But the same report also noted evidence supporting the contention that the CAFE law has contributed to increased vehicle accident fatalities because it forced automakers to produce smaller, lighter cars to meet the standards.

Barton's bill appears to try to shift the focus from CAFE by advancing the Bush administration's platform on hydrogen-powered cars, with proposals similar to those advanced in this year's State of the Union address. The bill would codify and authorize spending for the FreedomCar program and the related hydrogen fuel initiative. Unveiled in February 2002, FreedomCar is a public-private research effort aimed at helping U.S. automakers overcome barriers to development of commercially viable fuel cell-powered passenger cars. The hydrogen fuel initiative, announced last month, is aimed at helping the energy industry meet significant challenges associated with developing a nationwide hydrogen fueling network to support fuel cells.

Also bound to create a stir is Barton's title on the nuclear power industry. The bill calls for a comprehensive 15-year reauthorization of the Price-Anderson Act based on Rep. Heather Wilson's (R-N.M.) bill passed by the House in late 2001. The FY '03 Defense authorization bill included only a two-year extension of the federal nuclear insurance program for DOE contractors, and the FY '03 omnibus spending bill included a one-year reauthorization for commercial nuclear power plants.

Certain improvements to nuclear power plant security also appear in the bill, including provisions that allow guards to use weapons at nuclear plants to protect nuclear materials and prevent the unauthorized introduction of weapons onto NRC-licensed facilities. The bill also increases penalties for the sabotage of nuclear facilities.

Notably absent, at least for now, is a renewable portfolio standard (RPS), something favored by Senate Democrats last year but strongly opposed by House Energy and Commerce Committee Chairman Billy Tauzin (R-La.) and others during negotiations. Last year's RPS provision called for utilities to generate at least 10 percent of their electricity from renewable resources by 2020.

Instead, Barton includes provisions meant to expand and reauthorize the Renewable Energy Production Incentive, which provides payments for production of certain renewables and expands the program to include landfill gas. Barton also asks Congress to report on opportunities to develop renewable energy on federal lands and review other renewable energy resources in the country.

On the production side, the draft seeks to permanently authorize the Strategic Petroleum Reserve and the Northeast Home Heating Oil Reserve. The SPR's capacity would be raised from the current 700 million barrels to 1 billion barrels, and the draft authorizes $1.5 billion for that function. As for building a pipeline to natural gas fields in Alaska's North Slope, the bill provides "enabling legislation" and directs FERC to consider applications that follow a southern route through Alaska.

House Republicans seek to frame energy debate with 200-page draft bill