Message-ID: <26181614.1075844207094.JavaMail.evans@thyme> Date: Tue, 15 May 2001 11:18:00 -0700 (PDT) From: john.shelk@enron.com To: richard.shapiro@enron.com, linda.robertson@enron.com, tom.briggs@enron.com, joe.hartsoe@enron.com, sarah.novosel@enron.com, carin.nersesian@enron.com, james.steffes@enron.com Subject: Senate Energy Hearing Today Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: John Shelk X-To: Richard Shapiro, Linda Robertson, Tom Briggs, Joe Hartsoe, Sarah Novosel, Carin Nersesian, James D Steffes X-cc: X-bcc: X-Folder: \Richard_Shapiro_June2001\Notes Folders\All documents X-Origin: SHAPIRO-R X-FileName: rshapiro.nsf The Senate Energy Committee held an oversight hearing today on siting impediments to energy infrastructure. The four witnesses were Jerry Halvorsen of INGAA, William Nugent of Maine for NARUC, David Cook, general counsel of NERC, and Stan Szwed, vp-transmission of FirstEnergy Corp. The hearing was well attended by committee Republicans, but only Sen. Bingaman and Sen. Landrieu on the Democratic side, and then only briefly. Highlights NARUC's Nugent urged the Committee to move swiftly to confirm Wood and Brownell to FERC, noting their confirmation hearing is tomorrow. Consensus that energy infrastructure is not able to keep up with projected energy demand, both gas and electric. Surprising willingness (even among western Republican senators who are normally pro-states rights, pro-private property rights) that Congress should at least seriously consider, if not implement, some form of federal authority over power transmission siting. Specifics were not nailed down, with some senators expressing more support for treating electric like FERC already has power over natural gas, while others were inclined more toward a FERC back stop or last resort authority when state decisionmaking breaks down. The drift was certainly toward some enhanced federal role. NERC released is Summer Assessment today that is more pessimistic than California ISO on the extent of expected rolling blackouts and shortages this summer. NERC seees a capacity shortage in the Pacific Northwest this winter. While NY/NE is adequate this summer, Cook says it bears watching because of bouts of high heat in the region and a high level of unplanned outages that often occur in the region in the summer. Chairman Murkowski engaged in a series of questions with INGAA's Halvorsen designed to lay the blame for the natural gas capacity problem to California and corresponding high price levels on the actions of LDCs in California not supporting expansion of interstate pipelines. Halvorsen's testimony includes a chart of specific cases where LDCs intervened. In his verbal testimony, Halvorsen singled out Sempra as a source of opposition, including Sempra filings against expansions by Transwestern and Kern River. Chairman Murkowski got Halvorsen to say that the actions of the California LDCs and the intrastate nature of all gas pipelines in California effectively denied California consumers the benefit of open access for natural gas. Murkowski implied he would entertain a change in the Natural Gas Act as it relates to the status of interstate pipelines going in to California. Sen. Domenici joined the increasing chorus of members of Congress raising questions about why natural gas prices are low at the wellhead for his producers in New Mexico, but so high into California. He asked the panel who is making the money in the differential, but none of the witnesses wanted to tackle the question. This is just one more indication of the growing interest in the natural gas aspects of the California situation.