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Opportunity�in the form of an energy bill that includes well-crafted and broadly supported electricity legislation that would help the American economy�is knocking on Congress’ door. Lawmakers should seize upon the chance to help modernize and reinvigorate the nation’s electricity industry by enacting that energy bill into law now. The often-overlooked electricity provisions in the pending energy bill�which deal with controversial topics in a balanced way�are so deftly drafted that most major stakeholders support them. For example, the electricity provisions would bolster grid reliability, reduce existing disincentives to invest in infrastructure and provide carefully tailored enhancement for competitive market oversight. The bill also would modernize some outdated federal electricity laws. Bill H.R. 6, which includes electricity measures, is a massive piece of legislation containing a vast array of new laws, amended laws and economic measures designed to spur investment in energy infrastructure, promote conservation of resources, support research and development and boost production. Legislation of such magnitude would inevitably have a fiscal impact. In addition, some provisions may benefit some groups or constituencies more than others. Unfortunately, some very vocal critics have repeatedly cited a handful of the bill’s provisions in their bid to kill the bill as a whole. That narrow but noticeable criticism has generated some opposition on Capitol Hill and in the press. As a result, the bill is stalled. A House-Senate conference committee favorably reported the bill as a compromise measure in November 2003. The House ratified it immediately, but it has languished in the Senate. In the coming days or weeks, the Senate leadership may make a run at enacting a new, leaner measure (S. 2095) that softens its fiscal impact and omits a few of the most hotly contested provisions. But the prospects for final adoption by the Senate of an energy bill that is also acceptable to the House remain uncertain. That’s a shame. Economic fallout The nation’s electricity industry is suffering from underinvestment and dwindling participation in energy markets caused by years of regulatory uncertainty. The last major electricity-related legislation to come out of Congress was enacted 12 years ago. Since then, the industry has changed significantly. The federal laws need to catch up. The bill provides much-needed Congressional direction on some core issues that have preoccupied electric utility regulators and industry executives for years. The electricity industry’s retail sales affect consumers and businesses to the tune of about $250 billion per year. Providing certainty, and modernizing the industry, will benefit the country by stabilizing and reinvigorating this vital sector of the economy. Federal policy affects the entire country. Federal regulators generally have jurisdiction over the transmission of electricity (using high-voltage wires) in interstate commerce and over the wholesale sale-meaning sale for resale-of electricity in interstate commerce; thus the electricity that most Americans consume is keenly affected by federal policy. A sense of uncertainty regarding congressional policy poses a risk of hobbling the electricity industry by continuing to discourage investment in infrastructure and participation in markets. The Edison Electric Institute (EEI) has reported that electricity usage is expected to increase by 50% (i.e., one-and-a-half times today’s usage) over the next 20 years, but annual transmission line investment has declined by nearly $120 million per year for the past 25 years. And EEI reports that transmission investments in 1999 were less than half of those in 1979. Furthermore, instability in power markets has actually driven several large and legitimate players to exit the power-trading business entirely. Some uncertainty can be resolved right now if Congress were to enact the energy bill including the electricity provisions favorably reported by the conference committee. None of the solutions presented is an easy fix, yet they promote predictability and stability in the electricity markets and attract support from a broad range of stakeholders. As more than 50 million Americans learned quite well in the great blackout of August 2003, much of what we consider essential to our way of life is dependent upon electricity. If electricity isn’t available, American commerce and ordinary life essentially stop. In short, the laws that affect electricity are important. The electricity industry is among the nation’s most capital intensive and is unquestionably vital to our increasingly technology-dependent economy and lifestyle. Electricity legislation that has broad support and that would benefit the American economy is sitting on Congress’ doorstep. Lawmakers should open the door and enact the energy bill into law. William A. Moore is a partner in the Dallas office of Richmond, Va.-based Hunton & Williams. His practice focuses on administrative law and legislation related to the electric industry.

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