UPDATE 2-U.S. FERC supports separate power reliability bill.

By Chris Baltimore
567 words
7 January 2004
14:18
Reuters News
English
(c) 2004 Reuters Limited

WASHINGTON, Jan 7 (Reuters) - If the U.S. Senate can't pass broad energy legislation, Congress should write a stand-alone bill setting electric power grid reliability standards to avoid major blackouts, the chairman of the Federal Energy Regulatory Commission said on Wednesday.

Regardless of legislative actions, FERC will soon independently take some steps to shore up the rickety U.S. grid by summer, FERC Chairman Pat Wood said.

Democrats led by Michigan Rep. John Dingell want Congress to pass a narrow electricity reliability bill to help prevent a repeat of the Aug. 14-15 blackout that left some 50 million Americans and Canadians in the dark.

Recent data showing the U.S. economy is gaining strength means that electricity demand is likely to increase in the next few months, adding more pressure to a national grid already taxed to keep up with flows during peak periods.

Dingell last month asked House Speaker Dennis Hastert, an Illinois Republican, to take up his plan as soon as the chamber returns from its recess on Jan. 20.

"The (electric) reliability issue is very important," Wood told reporters at a news conference. He added that "if necessary" he would support a separate, narrow bill mandating electric reliability for the nation.

A broad energy bill addressing electricity, oil, natural gas, nuclear and other forms of energy passed the U.S. House of Representatives last year. However, the legislation is stalled in the U.S. Senate due to a dispute over who should pay to clean up water pollution from a gasoline additive.

"There is no justification for continuing to hold (electric) reliability reform hostage to comprehensive energy legislation," Dingell said in the letter.

Hastert's spokesman had no immediate comment.

Even if Congress passes the bill, "it doesn't look like that's going to happen yet in time for this coming summer," Wood said. "We've got to get started today" to ensure the nationwide grid is ready for the summer, when air conditioners send power demand to its yearly peak, he said.

FERC this week will likely propose rules to require utilities to report when they violate voluntary industry rules, he said. FERC will probably announce at its Jan. 22 meeting if it has the legal authority to go farther and impose more sweeping, mandatory reliability rules, he said.

"In the coming weeks and months you're going to see FERC go from zero to 60 on the issue of grid reliability," he said.

Wood said he believes that current law gives FERC the authority to take action, but is waiting for input from three other commissioners. For example, FERC could make approval of tariffs that utilities must file at the agency contingent on complying with reliability rules, he said.

Senate Republicans have said they will try again early in 2004 to pass the broad energy bill, which failed by two votes in November.

The Bush administration has insisted that Congress must pass a wide-ranging bill, now estimated to cost some $31 billion over a decade.

Last month, FERC said it will require U.S. utilities to report to the agency when they violate industry reliability guidelines now set by the North American Electric Reliability Council. The industry-funded group does not have the power to fine or penalize utilities that violate its voluntary rules.

Document LBA0000020040107e017003ah