FEDERAL POLICIES FAVOR CONCENTRATION OF UTILITY OWNERSHIP Senate, FERC Decisions Contradict Efforts to Build Local Electricity Systems

Decisions by the U.S. Senate and the Federal Energy Regulatory Commission this week undermine burgeoning efforts to build a more democratic electricity system. These two decisions reflect an unfortunate bipartisan effort to move electricity decisionmaking even further away from electricity consumers.

FOR IMMEDIATE RELEASE
April 27, 2001
Contact David Morris, Vice President, Institute for Local Self-Reliance
612-379-3815
dmorris@ilsr.org

FEDERAL POLICIES FAVOR CONCENTRATION OF UTILITY OWNERSHIP
Senate, FERC Decisions Contradict Efforts to Build Local Electricity Systems

Two federal bodies endorsed policies this week that undermine burgeoning efforts to build a more democratic electricity system.

"These two decisions reflect an unfortunate bipartisan effort to move electricity decisionmaking even further away from electricity consumers," observes Dr. David Morris, vice president of the Institute for Local Self-Reliance and author of the recently published book, Seeing the Light: Regaining Control of Our Electricity System.

On April 24, the Senate Banking, Housing and Urban Affairs Committee voted 19-1 to repeal the Public Utility Holding Company Act of 1935 (PUHCA). PUHCA was designed to reverse concentration of ownership in the utility industry. "Apparently, the Senate believes that when it comes to electricity, fewer is better," says Morris. "The vote in the Committee was almost as lopsided as the vote in favor of electricity deregulation in California. And we see what that bipartisan effort has wrought."

On April 25, the Federal Energy Regulatory Commission, also established in 1935, made a decision that echoed the centralizing philosophy of the Senate. FERC agreed to impose modest wholesale price caps on electricity sold in California this summer, but only if California submitted a proposal by June 1 to join a new 8-state regional transmission operator (RTO). FERC has repeatedly expressed its desire to give transmission construction and pricing authority to regional enterprises owned or controlled by large utilities and large power producers.

"It is instructive that FERC is demanding that California subordinate itself to a regional, privately owned transmission authority just when Governor Davis is trying to buy out privately owned transmission lines so that California can have more authority to design its electricity future," says Morris.

While the Senate and FERC make decisions that favor concentration, communities and entrepreneurs are busily constructing a more decentralized and democratic electricity system. Thousands of small power plants are being installed in households, office buildings, factories and shops. Cities are beginning to design their own energy policies, which favor increased conservation and local generation. Seeing the Light reports on these developments.

The Institute for Local Self-Reliance is a national nonprofit organization providing research, analysis and innovative policy solutions to build strong, sustainable communities. For more information or to purchase copy of Seeing the Light, contact ILSR at 612-379-3815 or visit ILSR's New Rules Project web site at http://www.newrules.org/

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