[Congressional Record Volume 144, Number 138 (Tuesday, October 6, 1998)]
[House]
[Pages H9652-H9653]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              ELECTRIC RESTRUCTURING--LET US GET IT RIGHT

  Mr. STEARNS. Mr. Speaker, deregulation of the airlines, natural gas, 
railroads, telecommunications, and trucking industries yield annual 
savings equal to nearly 1 percent of America's gross domestic product. 
Next January, in the 106th Congress, we will attempt to craft a measure 
that will finally and successfully unleash competition and savings from 
the utility industry.
  In recent years, competition has replaced regulation for the electric 
power industry in many other nations, including the United Kingdom, New 
Zealand, Norway, Chile and Argentina. Many took a very long term 
approach to this process. The United States faces a unique situation in 
that our electric power industry is largely already privatized. So we 
must focus on altering our current system and effectively fostering 
competition.
  Now, this should not be done through a Federal mandate. Five of the 
10 largest electric consumer States already have mandatory competitive 
restructuring. Clearly, we would be wise to make the State-mandated 
restructuring more efficient instead of imposing a separate, huge new 
Federal mandate.

[[Page H9653]]

  I see the ideal measure as one that fosters competition, avoids 
Federal mandates, and lowers rates for all consumers. To create this 
legislation, we must eliminate outdated laws, inject fairness into the 
process, and delineate the proper role of the Federal Government and 
State governments. But do not misunderstand me. Reforming the electric 
industry is no simple matter. This is an enormous undertaking. Next 
January, in the 106th Congress, we will consider the livelihoods of 
entire industries, constitutional questions, and the interests of the 
entire rate-paying public. Accordingly, we must address these points to 
fully realize the benefits of energy reform:
  Every customer must benefit from this deregulation, not just the 
large industrial users of electricity. I am concerned that any rush 
next year in reforming the electric utility industry could result in 
large industrial users seeing greater benefits, while residential users 
and small businesses would pay for that benefit. One must look at the 
State-level experiences of Massachusetts and California to see that if 
we do not effectively address consumer issues, we will certainly face a 
consumer backlash. The ballot measures in these States underscore how 
unique the electric power industry is: it permeates every aspect of our 
lives and, of course, our economy.
  We must honor past regulatory schemes and commitments and allow 
recovery of stranded investments. Electric utilities incurred 
``stranded costs'' under a regulatory scheme not of their own choosing. 
These utilities made long-term decisions based upon decades of 
regulation. To deny industry recovery of these costs would go against 
the fairness that I spoke of earlier. That being said, lower rates 
would be fostered by real deregulation and industrial and regulation 
innovation, not by just merely shifting costs. We should not merely 
``reshuffle the deck,'' so to speak, on who pays.
  A significant hurdle to deregulation is the diverse nature of power 
generators, including public power providers, municipalities, investor-
owned utilities, and Power Marketing Associations. Reconciling these 
disparate views will be a monumental task, no doubt, yet fairness 
demands that we produce a level playing field for all energy providers 
and transmitters.
  Reforming the energy industry on a Federal level means clarifying the 
roles of the Federal and State governments. Where does the Federal 
responsibility end and the State responsibility begin? The diverse 
situation among the States adds to the difficulties of this reform. 
Some States have always supported regulation; others have taken 
progressive stances, while still others, like my home State of Florida, 
enjoy the benefits of moderately priced electricity, and, of course, 
they see very little need for reform.

                              {time}  1700

  Eliminating the barriers to entry into the electricity market is 
fundamental, of course, to this reform. We must repeal, one, the Public 
Utility Regulatory Policy Act, PURPA, and the Public Utilities Holding 
Company Act, PUHCA, to ensure that any transition to retail competition 
should be truly competitive.
  The entire efficacy of PURPA centered on the supposition that 
producing electricity would become more expensive. In fact, Mr. 
Speaker, it has become cheaper. Thanks to PURPA, Americans will pay $38 
billion in higher electricity bills over the next 10 years than they 
normally would have.
  In conclusion, deregulation of the electric industry requires 
consideration of a myriad of factors. The stakes are high but so, of 
course, are the benefits. In the 106th Congress let us not rush. Let us 
work together and consider all these issues.

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