Abraham calls for more congressional debate on energy proposals

Energy Sec. Spencer Abraham Tuesday said more debate is needed on energy policy proposals. He was neutral on the price control plan unveiled by the Federal Energy Regulatory Commission June 18, saying it is too soon to tell whether it is the right balance between consumer protection and free market growth.

Jun 19th, 2001


By the OGJ Online Staff

WASHINGTON, DC, June 19 -- US Energy Sec. Spencer Abraham Tuesday told an American Automobile Association meeting "there has not been as much debate as perhaps we should have" on energy policy and that "Congress will play a role" in moving issues forward.

The White House released its an energy blueprint last month that proposes to streamline government regulations through more interagency cooperation. But many of the more controversial aspects of the energy strategy require congressional approval. These include exploration of the coastal plain of the Arctic National Wildlife Refuge, boosting tax breaks for renewable and energy efficiency technology, and limiting requirements for "boutique" reformulated gasolines.

Abraham predicted that the biggest congressional battles would be over how to expand and improve the nation's energy infrastructure. He called on Congress to allow the Federal Energy Regulatory Commission to control siting of new electric transmission lines. Current law lets FERC approve the route of interstate gas pipelines but not electrical transmission.

It is unclear whether Congress will pass comprehensive electricity reform legislation this session. A bill stalled last session failed despite backing of some House Republicans, led by House Subcommittee on Energy and Power Chairman Joe Barton (R-Tex.), and the Clinton administration.

Abraham was neutral about FERC's June 18 decision to unanimously extend price controls to spot market wholesale electricity throughout the West.

He said it is too soon to tell if the strategy would work. The White House has called the agency's action a price "mitigation" plan that does not use the kind of "hard" price caps that could discourage investment in future generation. Senate Democrats, led by Diane Feinstein (D-Calif.) of California, say they will not pursue stronger price cap measures in order to see if the FERC strategy will rein the market.

There is less comity in the House of Representatives. GOP leaders privately say the FERC plan is too strong and could limit future generation capacity. Democrats say the plan does not do enough to refund past overcharges and prevent price gouging. With increasing evidence to suggest the American public is unhappy with higher fuel costs, House Democrats are seeking controls on both electricity and gasoline prices.

Abraham reiterated the White House view that price controls on any energy commodity would hurt the market and worsen the problem. He noted that gasoline prices are dropping and inventory levels are encouraging. Yet an unexpected refinery outrage or pipeline problem could change the situation.

He said to avoid future shocks, "Congress needs to act because these challenges will only get worse. These are long-term problems that can't be solved quickly."

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