I would like to comment on a couple of things that the Secretary brought to our attention. His concern that the responsibility lay with Congress. And I am not one to duck responsibility by any means, but on the other hand, I believe charity starts at home.

You know, the EPA now has expanded its intention to close some 27 coal-fired plants in this country. And I am not going to argue the merits of EPA's case, but I will argue the merits of where you are going to get the power, if these plants go down. Some of these plants, I might add, are government-owned plants.

I would also remind the Secretary, as he addresses the responsibility of the Congress, that the White House has a responsibility. And they have an opportunity, because tomorrow the Nuclear Waste bill will go down to the President. It is past the Senate. It is past the House. It is up to the President and the administration to make a determination on whether or not 20 percent of the power that is generated in this Nation by the nuclear industry is going to be allowed to continue, or whether this administration and this President are going to allow it to choke in its own waste.

So, I would remind the White House, I would remind the Secretary, that indeed charity begins at home. We have a mutual obligation to address the crisis, relative to reliability of brown-outs. We have a mutual responsibility to address the availability of energy for power generation, whether it be oil, gas, coal, or nuclear.

And if the President vetoes the Nuclear Bill, and if the Congress does not override his veto, there are some serious consequences. The first consequence is quite clear. That consequence is going to mean that this administration is not going to resolve it on its watch. They are going to leave it for somebody else to do.

Secondly, for those members who may have some doubts on how they are going to vote, I certainly want-would not want to be running for re-election.

From a State where we had a considerable amount of waste that was stored, not permanently, but temporarily, and I was asked the question, why I supported leaving the waste in my State, when I had an opportunity to move it to one central location, in one particular State. And we all know where that is.

So, I would hope that this message would go down to the White House and the Secretary to remind them that we have dual responsibilities here and they cannot lay it all on Congress.

[The prepared statements of Senators Bunning and Graham follows:

PREPARED STATEMENT OF HON. JIM BUNNING, U.S. SENATOR FROM KENTUCKY Mr. Chairman, while I appreciate what you are tying to accomplish by having these hearings, I sometimes wonder if we are trying to fix something that isn't broken.

I know I have said it before, but it bears repeating. When it comes to electricity rates, Kentucky has the lowest in the country. This isn't because of luck. It's because the State of Kentucky has an abundant supply of coal, and we manage it well. In fact, we burn coal cleaner and more efficiently in Kentucky than ever before, and at the same time we have kept our electricity rates low.

I am sorry some States, especially in the northeast, aren't blessed with this natural resource, and choose to depend on burning oil for power generation. However, it's a free country and that is their decision. But, they shouldn't expect Congress to change the current structure of the electricity market just because they don't like their choices.

Outside of western Kentucky, where TVA is king, we have a pretty good mixture of electricity providers. There are a few investor owned utilities, a large number of hard working coops, and municipalities that provide much needed power in the State. All in all, things are working well in our state, and I don't want to be the one that rocks the boat.

Today I hope that someone on the panel will be able to explain to me what the benefits of deregulation are for States like Kentucky. Under the current proposals, I see higher rates and more Federal regulations on our coops, and that could potentially put them out of business. I don't see that as a winning formula for my folks back home.

But I will keep an open mind, and I am willing to work with all the participants in this debate to try to find a solution, if one is really necessary.

But, as I stated on Tuesday, I am not going to support a bill just to get a bill. And, I'm not going to vote for a bill that raises rates on Kentuckians so we can pat ourselves on the back and say we accomplished something.

PREPARED STATEMENT OF HON. BOB GRAHAM, U.S. SENATOR FROM FLORIDA Mr. Chairman, thank you for the opportunity to make some remarks to the Committee today on electricity deregulation. Electricity deregulation is a critically important issue. The electric power industry has grown enormously during the 20th century. Over this same time period our nation has Prospered significantly.

In fact one measure of a country's prosperity, standard of living and technological advancement is its per capita consumption of electricity. Those countries that have high per capita consumption of readily affordable electric power typically have high prosperity, a high standard of living, and high levels of technological advancement. Conversely, those countries that have low per capita consumption of readily affordable electric power typically have lower prosperity, a lower standard of living, and lower levels of technological advancement.

It is precisely because of the definitive link between national electric power consumption and national prosperity that this Committee's deliberations over the manner in which we restructure the electric utility industry in the United States are so critically important.

Mr. Chairman, the electric utility industry is currently experiencing unprecedented change. Mergers and acquisitions occur on virtually a daily basis, something almost unheard of until recently. Cross-industry mergers and acquisitions between electric utility companies and various other types of companies are also taking place. Some utility companies are becoming larger through acquisitions. Others are downsizing and becoming much smaller companies.

Some electric utility companies are selling their generating plants and are focusing on becoming strictly transmission and distribution companies. Others are buying the electric generating plants of other companies that are selling their power plants. I understand that one western electric power company has become a telecommunications company and is no longer even in the electric power generation and delivery business. The stock price of this company has increased by approximately six fold over the past year alone, exhibiting stock price fluctuations dramatically different from that of traditional electric utility companies.

Simultaneous with these dramatic structural changes taking place in the electric utility industry, the nation is also experiencing a very significant growth in electric load demand. The sale of electric energy rose about 31% over the period 1988 to 1998 and current electric load growth forecasts show that at current rates of growth, we will need about 91,000 MW of new generating capacity added over the next 20 years to maintain current system reliability. That amount of load growth is equivalent to the addition of 91 new 1,000 MW generating plants.

In the state of Florida alone, where electric load growth is very high, the forecast is that 8,000 MW of new capacity will need to be added to the system over the next 10 years.

In short, Mr. Chairman, the electric utility industry is in the midst of changes that can best be described as revolutionary. In view of this, Congress needs to ensure that we have in place a regulatory structure that will ensure that the transformation to a deregulated electric power marketplace takes place as smoothly and efficiently as possible.

Electric market surveys around the country with respect to deregulation have shown that Americans' first priority is a reliable source of electricity. In moving to a deregulated structure, we must ensure that any changes have no adverse impacts on the reliability of our national electric grid system.

Mr. Chairman, Senator Mack and I last year cosponsored Senate Bill S. 282, the "Transition to Competition in the Electric Utility Industry Act." This legislation addresses several aspects of electric deregulation related to the Public Utility Regulatory Policy Act of 1978 (PURPA) and is part of an overall electric industry deregulation effort. S. 282 makes changes to the mandatory purchase provisions of Section 210 of PURPA as well as addresses the important issue of the recovery of stranded costs.

I am pleased to say that some of the comprehensive electric deregulation bills that have been introduced address the issues included in S. 282.

Mr. Chairman, the nature of the bills which are the subject of these hearings is critically important.

I thank you for the opportunity to make these remarks.

Senator Bingaman.

Senator BINGAMAN. Mr. Chairman, I have no opening statement today. I look forward to the witnesses. You have a very distinguished group of folks here to testify, beginning with our colleagues, Senator Jeffords and Mr. Barton. We are glad to have them here. And I appreciate you having the hearing.

The CHAIRMAN. Senator Landrieu.

Senator LANDRIEU. The same, Mr. Chairman. Thank you for calling the hearing. I submitted my statement at the earlier hearing, and look forward to our witnesses.

I am going to have to slip out for another hearing, but will be back, and look forward to some question time.

Thank you.

The CHAIRMAN. Thank you. Senator Thomas.
Senator THOMAS. I have no statement, sir.

The CHAIRMAN. Thank you. Senator Jeffords, you have been out singing this morning. Unfortunately, we were here visibly working, so-we overheard you, but it was a long distance. And Representative Barton was here on time. So, we are going to start with him. [Laughter.]

Senator JEFFORDS. That is perfectly all right, Mr. Chairman. STATEMENT OF HON. JOE BARTON, U.S. REPRESENTATIVE FROM TEXAS

Mr. BARTON. Well, thank you, Chairman Murkowski and distinguished members of the Energy Committee. We are always delighted, in the House, to be invited to come over to the other body.

Let me start by giving some good news. Senator Craig should be happy to know that-when he comes, that we passed his Hydro License Extension bill yesterday, unanimously, in my subcommittee. We also are working with the minority on an agreement on his Bonneville S. 1937 bill. And I think we will pass that in May.

And your Hydro bill we are holding hostage right now, Senator, but we feel that our asking requirement is-is very minimal. And I am sure that when we just get you to sing the Eyes of Texas, that bill will also pass sometime in May. So, we are working on that. Congressman Young has confidently told me that if we do not pass your bill, I probably will not get out alive in this Congress. So, we are-we are working on that.

The CHAIRMAN. Well, I am glad that he-he communicated that subtle message.

Mr. BARTON. I actually told him that-that it really did not report favorably on him, when we had the hearing, and the Senator from Alaska trekked all the way over from this body, and the

House member could not walk across the hall. So, that shows well on you.

I have got a written statement for the record, I am going to put into the record.

The CHAIRMAN. Without objection.

Mr. BARTON. And I am going to give you kind of the executive summary and then-and then elaborate slightly, so that you can move along with your hearing. I know you have got a number of witnesses today.

We have looked at the bill that has been introduced by yourself, S. 2098. And we, being the majority and minority counsel in the House committee. There are a lot of similarities.

Your bill has PUHCA repeal. The bill that came out of my subcommittee has PUHCA repeal.

Both have prospective PURPA repeal.

Both leave the decisions to the States about when to open in each State's retail markets.

Both have the NERC Reliability Council language on the consensus reliability titled language.

Both have voluntary RTOs, but they do not mandate participation.

And neither the bill that you have introduced or the bill that passed my subcommittee gives the FERC the power to mandate— mandate the vested generation capacity because of market power consideration.

One thing that your bill does, that apparently Secretary Richardson testified in favor of yesterday, that the bill in the House Subcommittee does not do, is give FERC eminent domain authority for transmission siting. That is an interesting concept. As you well know, we have that in the natural gas pipeline industry.

We talked about it in our working group. And it was the consensus of the majority of the participants in our working group in the House that that was something that was not worth doing, but it is certainly a concept that needs to be addressed.

So, I guess the short version of my statement is, looking at what you have proposed in your bill and looking at what has actually passed the subcommittee that I chair, we think there are more similarities than dissimilarities.

We certainly think that if you are able to exert the leadership to report a bill out of the committee and off the Senate floor, and Chairman Bliley can report a bill out of full committee and through the floor, that we can go to conference sometime late summer or early fall and put a bill together that both bodies will pass and the President will sign. I think it is doable. I am not saying it is probable, but I do think it is doable.

Let me spend a little bit of time, now, going into a little more detail on some of the-some of the issues that I have just raised, kind of, in general terms.

The first thing that I would talk about is the whole issue of transmission and the bundled sales in the closed States. Probably, the single biggest debate we have right now at full committee in the House is-is whether to give FERC the authority to mandate and to control the unbundled sales in the closed States or whether to leave that to State jurisdiction.

And we are divided on that. I want to be honest with you. I am of the opinion that the States should continue to have jurisdiction over bundled sales, but if, for some reason, they discriminate against sales that are not generated from within-intrastate, then you should have a right to go to FERC to get relief, or another way to do that would be to give the States-continue to allow States to have the right over their bundled sales within their States, butbut State by Federal law that they cannot discriminate against any customer.

Either option would work. We are working on legislative language to try to-to try to address that.

The issue of reciprocity-something that both bills attempted to-your bill attempts to address-the bill that we produced in subcommittee, the reciprocity provision was stricken out on a 13 to 12 vote. I think reciprocity is important. I think reciprocity should be a part of any comprehensive bill.

I do not believe the way that-and I say this respectfully-I do not believe that the way it is in the bill that is before your committee is constitutional. I do not think you can give the States the right to enter into reciprocal agreements. I think that, by definition in the Constitution, it is an interstate issue. And you have to have a Federal reciprocity provision.

I would point to the many State compacts that have passed this committee, in both the Senate and the House, in that the Congress requires that we approve these compacts. I do not see how, if we have to approve the low-level waste compacts between the States, we could let two States or three States or any number of States then decide to enter into a reciprocity agreement without congressional approval.

So, while I believe your approach to reciprocity is-is-is untenable, I do believe the concept of reciprocity is a necessity in any comprehensive bill.

The last that I will talk about, and then I will-I will cease, is some of the things that are in the House-passed bill, where we reached out to the stakeholder community. We do have titles on the Bonneville authority-the Bonneville Power Administration. And I know Senator Thomas would be very interested in that part of our bill.

We also have a title on the Tennessee Valley Authority. Both of those titles were put together by working with the Congressmen and Congresswomen for those regions, getting stakeholder agreement, and putting those into the bill.

I do not claim those titles are perfect. I know that they can be modified and-and most likely improved here in the Senate. But the fact that we have a TVA title and a Bonneville Power Administration title that the region in those groups support, is a testament to the ability to bring people together.

We also had some provisions on consumer privacy in our bill that I think are worth looking at, that are not in the Senate bill. And we have some provisions on State grandfathering that need to be looked at. And I would-I would urge you to look at-look at those.

I guess, with that-I guess I would also point out one more thing. You know better than most of us, the sensitivity with the municipals and the rural electric co-ops. We also have titles in our