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Date: Tue, 22 May 2001 10:46:45 -0500
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To: "Aryeh Fishman" <afishman@bracepatt.com>, "Andrea Settanni" 
<asettanni@bracepatt.com>, "Deanna King" <dking@bracepatt.com>, "Dan Watkiss" 
<dwatkiss@bracepatt.com>, "Jacqueline Java" <jjava@bracepatt.com>, "Kimberly 
Curry" <kcurry@bracepatt.com>, "Paul Fox" <pfox@bracepatt.com>, "Ronald 
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Subject: DJ - Siting Of Transmission Lines May Be Tied With FERC RTOs
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FYI

DJ Siting Of Transmission Lines May Be Tied With FERC RTOs
Copyright , 2001 Dow Jones & Company, Inc.


WASHINGTON (Dow Jones)--The White House energy-policy blueprint's call for 
federal eminent domain authority to site power transmission lines appears to 
be garnering cautious support from Western-state lawmakers who typically 
support private property rights.

They indicated the administration's policy call will win their support as 
long as states continue to have a say in the siting process and the rights of 
private property owners are respected.

The report of the National Energy Policy Development Group, a White House 
task force spearheaded by Vice President Dick Cheney, called for the Energy 
Department, in consultation with federal agencies and state and local 
government officials, to develop legislation granting authority to obtain 
rights-of way for electricity transmission lines.

The proposed legislative effort should advance "the goal of creating a 
reliable national transmission grid," the White House policy blueprint 
recommends, noting that similar siting authority already rests at the federal 
level for natural gas pipelines.

"The siting process must be changed to reflect the interstate nature of the 
transmission system," the White House report said.

Senate Energy Committee Chairman Frank Murkowski, R-Alaska, sponsored 
legislation in the last Congress to establish federal eminent domain 
authority for transmission lines.

The White House report cited instances when states vetoed transmission lines 
despite the benefits the proposed facilities would provide for the interstate 
power grid. For example, Connecticut recently scuttled an underwater power 
line designed to supply power-hungry Long Island, N.Y.

"The states ought to have the maturity to deal with this themselves," 
Murkowski said.

But pro-states' rights lawmakers said the traditional transmission-siting 
role of states must be preserved, but be backed up by federal oversight.

The siting of transmission lines is the "prerogative" of state and local 
governments, said Sen. Pete Domenici, R-N.M., who nevertheless suggested he 
could support some form of federal authority as a "backstop" to state and 
local authority.

"I have been a critic of this and I remain so," Sen. Larry Craig, R-Idaho, 
said of the administration's policy recommendation, citing the potential 
impact on the "rights of private property owners."

Nevertheless, Craig suggested the administration's recommendation could be 
accommodated as part of the U.S. Federal Energy Regulatory Commission's push 
to turn control of power grid assets over to independent regional 
transmission organizations, or RTOs.

"Out of that (RTO) concept, it may be possible to address what the president 
has asked for," Craig said.

Tying such eminent domain authority to the RTO process is an approach FERC 
likely would take.

FERC Chairman Curt Hebert suggested the White House's policy recommendation 
could be delegated to RTOs.

"America has to decide: Is electricity going to be an interstate commodity? 
If so, we have to treat it like one," Hebert said last week in support of the 
administration's policy recommendation.

Linking transmission siting with RTOs also was espoused by Pat Wood, chairman 
of the Texas Public Utility Commission and one of President Bush's nominees 
to fill two vacancies at FERC.

Having RTOs oversee expansion of the U.S. interstate transmission system is 
"probably a good way to go," Wood said at his confirmation hearing last week.

Wood said the market should identify transmission expansion needs. But if the 
market doesn't produce the needed results, then there should be "a fallback 
role for FERC to assure there isn't a train crash," he said.

Such a regional planning approach within FERC's RTO scheme likely will win 
support from state regulators, said Charles Gray, executive director of the 
National Association of Regulatory Utility Commissioners.

The administration's call for framing legislation in consultation with the 
states likely will blunt potential opposition from state utility regulators, 
Gray said.

-By Bryan Lee, Dow Jones Newswires, 202-862-6647, 
mailto:bryan.lee@dowjones.com

(END) Dow Jones Newswires 21-05-01