Republican News

Sep 10 2003

ENERGY CONFERENCE UPDATE #1

Sent Sept. 3, 2003

At this moment, House and Senate conferees have not yet been named though we are hopeful that conferees from both Houses will be named tonight. If they are, conferees may meet as soon as 4 p.m. tomorrow in HC-5. If there is a delay in naming conferees, this meeting may be pushed back until Friday morning. This first meeting will likely comprise of brief opening statements from conferees laying out their positions on various issues. (We expect 13 conferees from the Senate side and between 50 and 60 from the House side.) No policy agreements will be announced at this meeting. Chairman Domenici and Chairman Tauzin have spoken frequently on the process they envision for this conference. The two chairmen have also had frequent discussions with the administration. We envision a swift, productive conference. There may be as few as two meetings with all the conferees, the one this week and one at end of the conference. However, if others are needed they will be scheduled. Chairmen Tauzin and Domenici anticipate presenting an agreement to conferees for their consideration by October 1. Shortly thereafter, a conference report should be ready for House and Senate consideration. Republican staff from the House Energy & Commerce and Senate Energy & Natural Resources Committees have had preliminary meetings to look at the legislative lay of the land. They will continue to meet several times a week. Staff has preliminarily identified Tier I and Tier II issues. The majority of the issues are Tier II issues that can likely be resolved on the staff level. A substantial number of these will be resolved in the next 10 days. Tier I issues will be addressed by members later in the conference. Those issues will include, but are not limited to, electricity, ANWR, CAFÉ, RPS, Climate Change, liability provisions in ethanol and the Alaska pipeline incentives. Tier I issues may also include Indian energy and hydropower – depending upon how staff discussions on those issues evolve. Senate conferees believe S. 14 as amended largely represents the current will of the senate regarding energy. The Senate held 18 roll call votes on the bill this summer. In all cases, the underlying provisions prevailed. Hence, Chairman Domenici believes S. 14 as amended and his electricity amendment most accurately reflect the senate’s position on energy. Regarding electricity. As most of you know, Senator Domenici and Senator Shelby reached an agreement regarding SMD and RTOs in the final hours before the August recess. This agreement was essential to the UC on an energy bill. That agreement is as follows: FERC cannot implement SMD until Dec. 31, 2006. FERC cannot mandate participation in RTOs until Dec. 31, 2006. Nothing in the agreement can be interpreted to infer that FERC has authority to mandate participation in RTOs AFTER Dec. 31, 2006. (In short, we will leave it to the courts to decide whether FERC has that authority.) The above agreement will be the Senate conferees’ position going into conference. This agreement was not reached lightly. It has not changed in the wake of the black-out. Chairman Domenici’s position on ANWR is that he strongly supports opening ANWR for energy development. If he sees any possibility for including ANWR in the conference report in a way that ensures the 60 votes needed for cloture, he will do so. We likely won’t know until the final hours of the conference whether the provisions in the conference report can draw 60 votes if ANWR is included. Hence, ANWR will remain in play until the final hours of the conference. Chairman Domenici also agreed as part of the energy bill UC to abandon his nuclear energy loan guarantees and purchase agreements in favor of a different avenue for incentivizing the nuclear energy industry. The new provisions are being crafted. They will be addressed later in the conference. It is Chairman Domenici’s position that climate change should not be addressed in the context of the energy bill. He retains that position going into conference. It is worth noting that the House has a similar position.