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Energy Bill Faces Critical Test

July 6, 2005

The bipartisan energy bill that sailed through the Senate on June 28 has the best chance for passage of any such legislation in recent years. But differences between versions passed by the Senate and the House of Representatives, plus the complication presented by President Bush’s nomination of a candidate to fill a seat on the Supreme Court -- may doom the bill once again.

The IBEW supported the Senate bill, which demonstrated broad bipartisan support in its 85-12 vote margin of passage. It raises the penalties for Enron-style market manipulation, places merger control in the hands of the Federal Energy Regulatory Commission and puts into place a mechanism for studying staffing levels in the utility industry that could lead to the creation of tens of thousands of more IBEW jobs.

But significant hurdles remain before the president can sign an energy bill, something he has been urging Congress to produce for more than three years. In this case, just as in years passed, the House of Representatives and the Senate passed entirely different bills. To pass, conferees from each chamber must meet to thrash out differences and come up with a compromise version that is palatable to both parties in both houses. Diverging priorities for leaders in the Senate and House of Representatives have doomed previous attempts at crafting a bill.

Sticking with the substance of the Senate bill would be a good strategy, said IBEW Utility Department Director Jim Hunter.

"The 85-12 vote was a strong signal to negotiators that something that looks like this bill will get passed in the Senate," Hunter said. "If you start messing with it, you stand a chance to lose it all."

The Senate bill’s market manipulation language is key consumer protection Democrats will insist on, Hunter said. It calls for raising the penalty from $5,000 to $1 million per violation for manipulating the market as Enron traders notoriously did during the California deregulation crisis. The utility personnel and training section of the legislation would set up a study on work force levels, which, the IBEW has maintained, in the post-deregulation environment remain dangerously low for adequate maintenance and service.

The FERC control section of the Senate bill would establish automatic oversight of utility mergers, sales and acquisitions totaling $10 million or more. Senators added the language for those concerned about the bill’s repeal of the Public Utility Holding Company Act of 1935, which protects ratepayers from potential abuses of electric and gas holding companies by bringing those that own at least 10 percent of any two public utilities under the control of the federal Securities and Exchange Commission.

"The fight to preserve PUHCA was a valiant one but FERC merger control is significant," said International President Edwin D. Hill. "The law says mergers must be in the public interest and allows for intervention if it’s not." President Hill has written to all members of the Senate expressing the IBEW’s cautious support of the bipartisan compromise bill and stating that the Brotherhood would strongly oppose any final version that removes the new authority for FERC.

Negotiators in both houses have much to reconcile. The House bill includes provisions for the protection of manufacturers of the fuel additive MTBE, suspected of contaminating ground water in several states. The House version also calls for drilling in the Artic National Wildlife Refuge. Hunter said a bill that includes either provision is unlikely to pass the Senate.

Negotiators have set an ambitious timeline for finalizing a compromise bill for votes in the House and Senate before the August congressional recess. But the announcement of the retirement of Supreme Court Justice Sandra Day O’Connor and the likelihood Bush will offer a nominee for Senate confirmation within the next few weeks could jeopardize that timeline.

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