[Congressional Record (Bound Edition), Volume 145 (1999), Part 5]
[House]
[Pages 7540-7541]
[From the U.S. Government Publishing Office, www.gpo.gov]



               COMPREHENSIVE ELECTRIC RESTRUCTURING BILL

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 19, 1999, the gentleman from Florida (Mr. Stearns) is 
recognized during morning hour debates for 5 minutes.
  Mr. STEARNS. Mr. Speaker, deregulation of the airlines, natural gas, 
railroads, telecommunications, and trucking industries yields annual 
savings equal to nearly 1 percent of America's gross domestic product. 
This Congress, we will attempt to craft a measure that will finally and 
successfully unleash competition and savings from utility reform, 
electric deregulation.
  In recent years, competition has replaced regulation for the electric 
power industry in a number of 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 alternating our current system and effectively fostering 
more competition.
  This should not be done through a Federal mandate. Clearly, we would 
be wise to make the State-mandated restructuring more efficient instead 
of imposing a separate Federal mandate. 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 To create this legislation, we must eliminate outdated 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 roles 
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. Congress considers the livelihoods of 
entire industries constitutional questions and the interests of the 
entire rate-paying public in addressing this very complex issue. 
Accordingly, we must address these points to fully realize the benefits 
of energy reform. Every consumer must benefit from this deregulation, 
not just the large industrial users of electricity. I am concerned that 
any rush 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.
  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 choosing. 
These utilities made long-term decisions based upon decades of 
regulation. To deny industry the recovery of these costs would go 
against the fairness I spoke of earlier. That being said, lower costs 
should be fostered by real deregulation and industrial and regulatory 
innovation, not by simply shifting costs. We should not merely 
``reshuffle the deck'' to see 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, yet fairness demands that we 
produce a level playing field for all energy providers and 
transmitters.

[[Page 7541]]

  So reforming the energy industry on a Federal level demands 
clarifying, simply clarifying the roles of the Federal and State 
governments. Where does the Federal responsibility end and the States' 
begin? The diverse situation among the States adds to these reform 
difficulties. 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 see 
little need for major reform.
  Eliminating the barriers to entry into the electric market is 
fundamental to this reform. We must repeal the Public Utilities 
Regulatory Policy Act, PURPA, and the Public Utility Holding Company 
Act, PUHCA, to ensure that any transition to retail competition is 
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 electric bills over the next 10 years 
than they should.
  Deregulation of the electric industry requires consideration of a 
myriad of factors. The stakes are very high, but so are the benefits. 
To that end, I am introducing today a piece of Federal legislation that 
will change all that. It is called the Electric Energy Empowerment Act 
of 1999. It will not mandate the States to act, but instead will 
empower and encourage them to enact measures providing these customers 
retail competition and choice.
  My legislation amends the Federal Power Act to clarify jurisdictional 
boundaries between state and federal authorities, thus empowering the 
states to enact competitive retail electricity markets. As an incentive 
for the states to move forward, the legislation includes a reciprocity 
condition. Further, the legislation eliminates the existing federal 
barriers to competition: it encourages the establishment of independent 
transmission system operators, and it deregulates the wholesale market 
by making the FERC wholesale open access rules applicable to non-
jurisdictional entities.
  I think everyone will agree that we are inevitably moving toward an 
electricity industry based on competition, market force, and lower 
rates. This is certainly my goal as I introduce this legislation today.

                          ____________________