[Congressional Record Volume 149, Number 63 (Wednesday, April 30, 2003)]
[Senate]
[Page S5600]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SHELBY (for himself, Mr. Miller, Mr. Lott, Ms. Landrieu, 
        Mr. Sessions, Mr. Cochran, and Mr. Chambliss):
  S. 954. A bill to amend the Federal Power Act to provide for the 
protection of electric utility customers and enhance the stability of 
wholesale electric markets through the clarification of State 
regulatory jurisdiction; to the Committee on Energy and Natural 
Resources.
  Mr. SHELBY. Mr. President, on July 31, 2002, the Federal Energy 
Regulatory Commission, FERC, issued a notice of proposed rulemaking to 
create a one-size-fits-all template for electric markets referred to as 
``standard market design,'' SMD.
  The SMD rule would bring about numerous sweeping changes, the degree 
and consequences of which are still being assessed. The proposed rule 
would require customers to pay for transmission facility upgrades 
caused by new generators, even if the customer does not need or use the 
power from those generators.
  FERC's proposal would also usurp State authority to obligate 
utilities to serve customers, set generation reserve margins, centrally 
control generation dispatch, and set rates for retail transmission 
service. FERC's proposed rulemaking will effectively eliminate a 
State's ability to make decisions on issues specific to their State. 
Such sweeping changes to the energy industry should only be made after 
careful consideration of all potential consequences. After hearing 
these concerns, FERC promised a white paper to speak to the many 
concerns of myself and many others.
  On April 28, the Federal Energy Regulatory Commission released its 
long-awaited white paper on Wholesale Power Markets and Standard Market 
Design. I and others had hoped that the release of that paper would 
signal a shift in the approach that the Commission has been taking with 
respect to the ``federalization'' of electricity regulation and 
markets. Disappointingly, despite some modest changes in approach, the 
Commission and Chairman Pat Wood have decided to move away from a 
partnership with the States toward Federal domination of the 
electricity system and electricity regulation.
  In the document, the Commission reasserts its authority to regulate 
the terms and conditions of retail transmission, mandates the formation 
of Regional Transmission Organizations, and limits State authority to 
protect existing native load customers from the loss of transmission 
rights. The paper promises more ``technical conferences'' and 
consultation with the States, but does not change the premise upon 
which the Commission's Standard Market Design, ``SMD'', Notice of 
Proposed Rulemaking rests--that the States and regions serve only as 
adjuncts to the Commission as it devises new wholesale market rules 
that directly impinge upon retail markets.
  In light of the Commission's white paper and the Senate's intention 
of quickly addressing energy policy, my colleagues and I present 
legislation today to ensure the concerns of my constituents and the 
constituents of my colleagues are addressed. This crucial legislation 
will ensure that States maintain their jurisdiction over retail 
utilities, that native load customers can be assured of reliability of 
service, that customers are not forced to socialize the cost of new 
transmission developed in their area but intended for other regions, 
and finally the legislation will prohibit the FERC from implementing 
its current SMD rule nor any rule that is of similar substance.
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