Congress Abandons Efforts To Enact Energy Package

by Mike Tomsu, Kathleen Lake, Jamie Serota, Stephen Angle, Christine Vaughn, Donna Bobbish and Frank Verrastro.

New Senate Energy Chairman Vows To Take Up Energy Legislation In Next Congress

On November 13, 2002, the joint House–Senate conference committee on energy decided to forego further work on energy legislation this session. Both Democratic and Republican leaders cited a decided lack of time and consensus on key provisions of the package, particularly the electricity title, as the principal reasons.

Leaders from both parties, including Senator Pete Domenici (R-NM), who will chair the Senate Energy Committee in the 108th Congress, already have indicated that they intend to pursue a new measure when the 108th Congress convenes next year.

Earlier in the week, Rep. Billy Tauzin (R-LA), who chaired the joint conference committee, had offered conferees a stripped-down energy package that included only two titles – dealing with pipeline safety and a multi-year extension of the Price-Anderson Act (providing indemnification to Department of Energy contractors with respect to nuclear accidents). Tauzin’s rationale for selecting these provisions was that they both had been adopted unanimously by the conferees in previous meetings. Senate Democrats counter-offered a significantly larger package of provisions, including tax incentives, clean coal provisions, efficiency measures and other items on which there appeared to be consensus. Neither the House nor the Senate packages incorporated provisions dealing with electricity, the Arctic National Wildlife Refuge ("ANWR"), ethanol, global climate change, or language on renewable portfolio standards – several of the more contentious items debated during the conference. At the end of the day, however, it became clear to the Members that, with major legislative items still on the floor calendars, there simply was not enough time to develop, circulate and pass an acceptable energy package this year before the end of the session.

Both the House and Senate did approve a stand-alone measure (HR 3609) addressing pipeline safety titles previously agreed upon by the conferees. Earlier versions of pipeline safety legislation had been adopted by both chambers, but then rolled into the energy package. The final version that passed Congress mandates periodic pipeline safety inspections, increases civil penalties for violators, provides new funding for research and development and toughens pipeline operator qualifications. It also includes a whistle-blower protection clause to protect line employees that reveal safety violations or operational flaws.

How reconstituted energy legislation will fare in the next Republican-controlled Congress depends on a number of factors. For starters, both the chairmanship and membership of the Senate energy panel will see marked changes with Domenici taking over from fellow New Mexican, Democratic Senator Jeff Bingaman. While both share an affection for the national labs in their home state, their approach on energy priorities is significantly different. In addition, with return to GOP control, committee ratios will be altered and the make up of the panel also is likely to change. For example, ranking Republican and former chairman Frank Murkowski will be leaving the Senate later this month to assume the governorship of Alaska. Murkowski had been a major force behind ANWR development and the construction of the new Alaska gas pipeline. Senator Mary Landrieu (D-LA) still faces a run-off election in December to retain her seat and observers expect the White House to make another major push to secure the seat for the GOP and bolster Republican control in the Senate. On the topical front, a variety of energy-related factors from winter weather and gas/electricity supply and price changes to supply dislocations associated with any action taken against Iraq can measurably alter the energy agenda for when the new Congress convenes next year.

Despite the Republican’s recent election victories, prospects for some of the more controversial provisions that could be included in future energy legislation are not appreciably better than they were this session. For example, while the Republicans undoubtedly have the votes to put an ANWR provision in the committee mark-up, they still will not have the 60 votes necessary to overcome a threatened Democratic filibuster on the floor. The Senate remains pretty evenly divided and Sens. Kerry (D-MA) and Lieberman (D-CT) have vowed to prevent such an ANWR proposal from becoming law. In addition, Democrats still may be expected to propose provisions promoting renewable energy resources and global climate language.

Finally, disputes over how to deal effectively with the question of electricity restructuring likely will continue. There was no electricity title included in the House-passed bill. Rep. Joe Barton’s (R-TX) attempts to substitute his 11th hour suggestions for a modest electricity title garnered virtually no support in the conference. House Democrats and Republicans remain divided on how to address the issue of market manipulation experienced in California in 2000-01. FERC’s ongoing investigation of price and supply anomalies has yielded little in the way of concrete remedies to date. Philosophically, House Republicans do not want to introduce broader market re-regulation. As for the Democrats, they have not yet reached a consensus on whether to seek re-regulation and, if so, how to do it. Further, western state governors, and much of their constituency, oppose increased federal regulation of local markets. How House Energy and Commerce chairman Tauzin and the Administration choose to pursue this restructuring while providing reliable and affordable energy supplies to consumers and addressing the concerns of their political base will be one of the major determining factors in fashioning the electricity debate in the new year.