After big blackout, will energy bill keep US lights on?

The epic blackout that cascaded across power lines serving 50 million customers last month is shining a bright light on otherwise obscure negotiations on Capitol Hill to overhaul the nation's energy policy.

Until the lights went out, the electricity piece of the energy bill was what insiders called "deep in the weeds" - too arcane to interest anyone but the experts.

Now, talk of how to prevent future blackouts is a dominant concern for lawmakers fixing the final shape of the energy bill, for which the conference began Friday. Members on both sides of the aisle called for quick action to expand the nation's transmission capacity, modernize equipment, and improve maintenance.

But the debate has also revived deep regional disagreements over how much control Washington should exert over state power commissioners and utilities. It's coming down to a struggle between the claims of states rights and low-cost power versus the need for a more reliable power grid that functions nationwide.

In House hearings last week, witnesses from Midwestern states impacted by the blackout said that one of the reasons so many power plants tripped off-line was human error and poor communications. Had a warning of problems on the grid been sent, it could have prevented damage down the line, they said.

Some directly challenged a deal brokered by Senate Republicans before the blackout that would prevent Washington from requiring utilities to cede control of their wires to regional transmission organizations (RTOs). "A three-year delay, as some are proposing, would impose an intolerable risk on the nation," said Ohio Gov. Bob Taft (R).

But for people in Southeast and Western states, the advantages of more federal control are not so evident. Power in these states is cheaper than in the Northeast or Midwest. Merging into a nationally regulated power grid could result in higher prices, they worry.

"Our ratepayers in a poor state like Mississippi will have to pay higher rates to get power to other parts of the country," says Sen. Trent Lott (R) of Mississippi. "In my state we drill oil, we have nuclear power, we build transmission lines you couldn't get permits for in the Northeast. They haven't paid the price," he adds.

The three-year delay in expanding federal authority over the nation's transmission grid was part of a deal brokered among Republicans in the Senate to ensure that a bill passed the Senate before the August recess. In exchange for his vote, Sen. Richard Shelby (R) of Alabama and others cut a deal with the GOP leadership to prevent the Federal Energy Regulatory Commission from mandating that all system operators join RTOs.

The deal could put the Bush administration in an awkward spot. In questions to Energy Secretary Spender Abraham, Rep. Edward Markey (D) of Massachusetts asked: "Haven't you traded away already what is potentially one of the solutions to the [blackout] problem?" Mr. Abraham responded in part: "To have gotten a bill through the Senate required us to support that provision. Our top priority is to get an energy bill passed...."

The White House also faces pressure from within the Federal Energy Regulatory Commission. The new FERC chairman, Pat Wood, says that the commission needs more authority to prevent future blackouts. "Currently, there is no direct federal authority or responsibility for the reliability of the transmission grid," he told the House Energy and Commerce Committee last week.

The bill continues to draw intense lobbying. Regional giants like Southern Company are working against giving more authority to the FERC to mandate RTO membership, while big power wholesalers want the reliability that a federal presence on the grid could provide.

"There is only one provision in the energy bill that we support as addressing the blackout issue: the creation of national reliability standards that are enforceable and that basically would improve communications between different utilities, states, and regions," says Tyson Slocum, a researcher with Public Citizen, a Washington based public interest group.