Statements
and Speeches
Hearing
on National Electricity Policy
September
20, 2001
By
Henry A. Waxman
Today, the Subcommittee
hears testimony from the Department of Energy and the Commissioners
of the Federal Energy Regulatory Commission regarding national electricity
policy.
I am uncomfortable
about turning to this issue so quickly after the tragic events of
last week. Today's testimony raises a number of very controversial
issues, and I would prefer to focus on actions that bring us together
rather than immediately jumping into divisive policy debates.
Having said
that, I can see that the Chairman is intent on moving forward. And
we cannot downplay or gloss over the very significant policy disagreements
that underlie electricity legislation.
First, we must
ensure that we do no harm. California's electricity restructuring
legislation was hurried through the state legislature and the flaws
became evident only much later. Many other states have since acted
with equal speed, and I am not sure that anyone fully understands
how those laws will turn out.
So we must be
careful. We must also learn from recent experience.
As California
and other Western states struggled through their electricity crisis
over the past year, the Department of Energy sat on its hands. The
Secretary even embarked on a public relations campaign to convince
the American people that the federal government could not meaningfully
assist Western families. FERC refused to help until it was confronted
with the very real possibility of congressional action. Throughout
the West, we became painfully aware of how federal inaction could
harm consumers and the States.
Ultimately,
President Bush ended up endorsing FERC action to restrain runaway
electricity prices. But for those of us from the West, this action
came too late to prevent major economic hemorrhaging. And I remain
concerned that FERC's actions did not go far enough.
As we now begin
to discuss legislation on electricity policy, it is clear that we
need to ensure that FERC is more responsive to consumers. It must
become more effective at addressing market power and preventing
market manipulation. We can't allow the intransigence of one Commissioner
to prevent meaningful federal action when it is desperately needed.
The Western
states are certainly opposed to greater authority at FERC at the
expense of the states. I'd like to submit for the record two letters
from the Western Governors Association dated September 6th and September
12th on this issue.
Additionally,
there are a number of other critical issues that must be addressed
in the context of electricity restructuring.
For example,
we must take energy conservation seriously. DOE has estimated that
investments in energy efficiency have generated a 30 to 1 rate of
return. Efficiency and load management measures also directly improve
system reliability by reducing demand and strain on our delivery
systems. But with deregulation of the industry, utility investments
in energy efficiency and load management programs have dropped by
roughly 50% since 1993. We must reverse this trend.
We must also
seek to spur investment in distributed generation and renewable
generation. This approach will best protect the environment while
also creating a more secure electricity infrastructure.
I look forward
to hearing today's witnesses and hope that we can act in a thoughtful,
bipartisan manner.
|