FERC Might Get More RTOs

Republicans and the White House are trying to fashion a deal that would let the Federal Energy Regulatory Commission proceed with its plan for U.S. utilities to join regional grids despite opposition from Southern lawmakers, Texas Rep. Joe Barton said recently.

"The disagreement over FERC's role in boosting U.S. electricity reliability and transmission investments must be resolved for Republican leaders to meet their October deadline to finish writing an energy bill."

Barton, a Republican who heads a House Energy subcommittee, said in an interview that he would meet with Vice President Dick Cheney to discuss a compromise deal.

The FERC last year proposed a set of rules that would require utilities to combine their grids into super-regional networks operated by independent third parties. The rules would also promote competition and create market monitors to watch for unfair trading practices.

The FERC plan has been attacked by Southern lawmakers, including Republican senators Richard Shelby of Alabama and Trent Lott of Mississippi. They see it as a federal power grab and a threat to the region's cheap power supplies.

To convince Shelby and other Southern senators to support a Democrat-written energy bill in July, the Bush administration agreed to support a delay in FERC's plan until 2007.

Under a new compromise advanced by Barton, Southern utilities could retain some flexibility in shaping regional groups, he said.

"We are discussing with the Senate a compromise on the Shelby amendment that would guarantee those regions of the country with concerns about the (FERC plan) that they're not going to be abused," Barton said. Shelby believes that his existing deal "best serves energy consumers and ensures that utilities will not be forced into FERC's proposed regional transmission organizations," a spokeswoman said. Barton said "the White House is very supportive of finding a compromise ... that protects the interests of the region that Mr. Shelby represents yet frees the rest of the country to pursue their way of changing the grid."

Sen. Pete Domenici, the chief Republican negotiator, is "standing by the deal" he made with Shelby, his spokeswoman said.

Rep. Billy Tauzin, a Republican and chief House negotiator on the energy bill, supports the compromise, Barton said.

Tauzin has said the deal would offer incentives for utilities to join grid groups, rather than mandating membership.

Northeastern states that were hit by the unprecedented August blackout that left 50 million people in the dark support the FERC rules, as do most Midwestern states. Earlier this week, 17 senators from both regions sent a letter to energy bill negotiators supporting FERC's plan.