Power Engineering - OCC and IEU Ohio say Senate vote on energy bill amendments strikes blow against customers' interests

COLUMBUS, Ohio, April 11, 2002 -- Action taken Wednesday in the U.S. Senate has potentially devastating consequences for Ohio's electric choice program and the state's electric customers, an organization said Thursday.

By a vote of 67-32, the Senate defeated the "Craig Amendment" to S. 517, the federal energy bill. The amendment would have stripped the bill of certain electricity provisions added to the bill in March.

The provisions that the Craig Amendment sought to strike from the legislation would repeal consumer protection standards contained in the Public Utility Holding Company Act (PUHCA) and also scale back the authority of the Federal Energy Regulatory Commission (FERC) to oversee the development of a competitive wholesale electric market.

PUHCA was enacted in 1935 to give the federal government the authority to protect consumers against the abuses of large utility holding companies that operated beyond the reach of any individual state.

Some say PUHCA's objectives have become more important as utility mergers and combinations have significantly increased concentration of utility ownership.

"Repealing PUHCA's consumer protection standards and scaling back FERC's authority over the development of a competitive wholesale electric market would be a major setback to our effort to ensure reliable, accessible and affordable electricity for Ohio's consumers," said Ohio Consumers' Counsel Rob Tongren, the residential utility advocate.

"Without a truly competitive wholesale market, the competitive retail electric market envisioned in Ohio's electric choice legislation will never materialize, and many of the consumer benefits of Ohio's electric restructuring legislation will be delayed for years."

"The actions taken by the Senate are unmindful of the real world changes that have taken place in the electric industry and work to the substantial disadvantage of consumers' interest in reasonable price and reliable service," said Sam Randazzo, General Counsel for the Industrial Energy Users-Ohio.

"These actions were taken over the objections of residential and industrial customers plus municipal electric utilities and advanced through a process that embraced a large package of amendments when only two Senators were in the room," said Randazzo.

"The Supreme Court recently found that electricity is inherently in interstate commerce. The present trend in the Senate will permit monopolies to, once again, seek a hiding place in a gap created by a disconnected legal structure that puts the monopolies beyond the reach of any individual state and in an area that is untouchable by the federal government," he added.

"We are extremely disappointed that the Craig Amendment, which would have removed the troublesome provisions from the federal energy bill, was defeated," Tongren added. "We commend Ohio Senators Mike DeWine and George Voinovich for doing the right thing and voting in favor of the Craig Amendment. It is unfortunate that so few of their peers in the U.S. Senate have been able to recognize the great danger to consumers in allowing these provisions to move one step closer to becoming law.

"State leaders and average citizens alike should be worried about the consequences for Ohio if the Senate approves S. 517 in its current form," said Tongren. "Ohioans should congratulate Senators DeWine and Voinovich for their sound judgment on this issue and encourage them to remain strong in their opposition to the electricity provisions of S. 517 as the full energy bill comes to the Senate floor for a vote."

"As illustrated by the problems we had with electric supply and prices here in the Midwest in 1998 and 1999, the role of the federal government is absolutely essential to the creation of an electric system capable of meeting demand in real time at reasonable prices", said Randazzo. "Ohio and other states have enacted legislation to harmonize their laws with the law of physics and to proceed with a structure that acknowledges the role that only the federal government can play when it comes to interstate commerce. The Senate is turning the lights out on this vision to the significant disadvantage of the Midwest and states like Ohio. Yesterday was a terrible day for electric customers," he added.

"In addition to commending Ohio's Senators, Ohio's Consumers' Counsel, Rob Tongren, and the Public Utilities Commission of Ohio deserve great credit for their strong advocacy in favor of improving the Senate legislation," said Randazzo. "The type of commitment and unity of purpose that these Ohio agencies have shown give us hope and great motivation to continue our work to get good legislation enacted in Washington," he added.

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