Date: 1986-04-21
Speaker: RICHARD SHELBY (democrat)
Chamber: H

as a cosponsor of the Electric Consumers Protection Act. Over the last year. H.R. 44 has attracted over 180 cosponsors. The reasons are clear. It corrects two simple wrongs in the relicensing of existing hydroelectric projects. First. we wanted to eliminate any claim that an applicant should be extended a preference in relicensing proceedings based solely on the applicants government status. The public is your and my constituents. Mr. Speaker. regardless of what utility happens to serve them. My own constituents are served by both privately and publicly owned utilities. But nothing I have learned over the last 2 years has convinced me that these projects should change hands to serve another segment of the public simply because those people happen to be served by utilities that are government owned. Second. we wanted to ensure that if a hydroelectric project is taken away. the consumers it served should be justly compensated. The legislation before us today is very different from H.R. 44 as originally introduced. Several concerns about H.R. 44 were raised before the Energy and Commerce Committee. To resolve these concerns. the Subcommittee on Energy Conservation and Power developed a consensus compromise. It was this consensus package that was unanimously approved by the Energy and Commerce Committee for consideration today by the House. The package before us eliminates all possibility of preference in relicensing proceedings. We took this action because it is inconceivable that there can be a tie between applicants for the same hydroelectric project. Instead. licenses will be issued to applicants whose plans are best adapted to serve the public interest taking into account several factors. In this regard. the physical and financial needs of each applicants customers and consumers will be examined. This legislation recognizes utilities mandatory duty to serve their customers at the lowest possible cost. For nonutility applicants. the needs of their business. the needs of the communities where they are located. and the needsof the customers who ultimately pay for their products are all taken into account. The right of last amendment was eliminated to ensure that -each applicant will have the opportunity to prove its superiority without prejudice or favor. The Federal Energy Regulatory Commission will be expected to evaluate each applicants capability to satisfy license conditions. Of course. the existing licensees operating record will also be taken into account. Each applicants personnel. facilities. accomplishments. capabilities. and actual experience will be examined. This should guarantee that the applicants real ability to do the best job will be an important part of the basis for awarding a license. The package also ensures that consumers served by a hydroelectric project are fairly compensated in the event that the right to operate that project is transferred. In the event a license is transferred. FERC must order payment of at least net investment. and may order payment of additional compensation to mitigate demonstrated economic loss to the former licensees ratepayers. We have also included in the consensus package a provision on coordination services. This provision is designed to enable new licensees to benefit from dams they have taken away from prior licensees. We spent a great deal of time on this provision when we developed this legislation. We recognized the controversial nature of transmission access. I am now confident that this provision is narrow enough to prevent a practice that has become known as cherry picking. Under section 4(d)(2). new licensees will not be able to use the prior licensees transmission systems to deliver power to prior licensees customers. Further. this provision does not assume that transmission is always technically feasible. In cases where transmission is not technically feasible. FERC would have the authority to order such reasonable coordination services as are necessary to effectuate the license transfer. This of course would have to be determined on a casebycase basis. Also section 4(d)(2) ensures prior licensees will be able to recover costs demonstrated by the prior licensees as being related to the provision of project specific coordination services. including transmission services. It is intended that prior and new licensees will negotiate the appropriate compensation. In the event the parties are unable to reach an agreement. however. FERC will set the rate of compensation. Of course. should FERC have to set the rate of compensation. the new licensee will have the opportunity at FERC to challenge any such costs. Importantly. this bill will cover the 10 contested relicensing cases pending before FERC. Some suggested that these cases by excluded. I could not agree. It made no sense to exclude these cases. since it was the threat to consumers in these cases that gave rise to this legislation. The Energy and Commerce Committee agreed with this and this package will put into a place a process that will essentially force the parties in these cases to enter into settlement negotiations. Finally. this bill includes provisions that. while not directly related to relicensing. address our Nations need to efficiently utilize hydroelectric resources. I am particularly pleased with one of these provisionssection 6(b). This provision will enable State and local governments to avoid FERC redtape whenever they install turbines of 40 megawatts capacity or less on conduits that are used solely for municipal water supply purposes. In the region of the country which I represent. section 6(b) will allow power to be generated on conduits whose power potential has been wasted for years. Mr. Speaker. the legislation before us today represents a lot of hard work by a number of colleagues on both sides of the aisle who represent very diverse interests. The need for the legislation is clear. The legislation in fair. It represents sound policy. And. most importantly. it will protect the millions of consumers who currently benefit from cheap hydroelectric power. I urge my colleagues to support this legislation. and vote "aye" on H.R. 44.