Number: RL32728
Title: Electric Utility Regulatory Reform: Issues for the 109th Congress
Authors: Amy Abel, Resources, Science, and Industry Division 
Abstract: On April 24, 1996, the Federal Energy Regulatory Commission (FERC) issued Orders 888 and 889. FERC issued these rules to remedy undue discrimination in transmission services in interstate commerce and provide an orderly and fair transition to competitive bulk power markets. Order 2000, issued December 20, 1999, established criteria for forming transmission organizations. Comprehensive electricity legislation may involve several components. The first is PUHCA reform. Some electric utilities want PUHCA changed so they can more easily diversify their assets. State regulators have expressed concerns that increased diversification could lead to abuses, including cross-subsidization. Consumer groups have expressed concern that a repeal of PUHCA could exacerbate market power abuses in a monopolistic industry where true competition does not yet exist. The second issue is PURPA's requirement that utilities purchase power from QFs. Many investor-owned utilities support repeal of these mandatory purchase provisions. They argue that their state regulators' "misguided" implementation of PURPA has forced them to pay contractually high prices for power that they do not need. Opponents of this legislation argue that it would decrease competition and impede development of renewable energy. The third main issue is reliability. Without mandatory and enforceable reliability standards, proponents argue that reliability of the electric power system will not be at acceptable levels. Opponents say these standards are unnecessary.
Pages: 13
Date: August 18, 2005