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The Honorable Jeff Bingaman
Chairman, Senate Energy and Natural
     Resources Committee
U.S. Senate, Room SD-364
Washington, D. C.  20510

Dear Mr. Chairman:

            I am writing to, first, thank you for including IBEW testimony at the committee hearing on July 25, 2001.

            Second, somewhat short notice of invitation and the time allotted for verbal testimony precluded some of the comments and observations that I wanted to express to you and the Senate Energy and Natural Resources Committee members.  I ask you to consider comments attached to this letter with the testimony submitted for the hearing of July 25, 2001.

            In recent years, the Congressional debate over electricity has lost its focus on the fundamental issues and devolved into arguments over self-serving regulatory schemes touted by various parties, who are more interested in gaming the system for their advantage, than achieving the fundamental goal of the electricity system:  adequate, affordable and reliable electricity for all Americans.  Your White Paper on Electricity Legislation is clearly an effort to get on track and rehabilitate the wholesale electricity market.

            The goal of the Congress should not be to "prove" some economic theories, or to go with whatever concept seems to have the momentum of the moment, or to enact policies which would benefit some constituents or stakeholders at the expense of others.

            Chairman Bingaman, the IBEW appreciates your willingness to hear the views of the IBEW as representatives of the workers who build, operate and maintain the most complex and successful machine in history America's electric supply system.

                                                            Sincerely,

                                                            Edwin D. Hill
                                                            International President

Enclosure
Copy to  Full Committee, Energy and Natural Resources

ADDENDUM TO
INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS TESTIMONY
JULY 25, 2001

        The IBEW strongly supports Congressional action to facilitate development of new generation capacity and expanded transmission facilities, provided that such action is resonant with the goal of the 1992 Energy Policy Act:  a robust wholesale electricity market.  Until that goal is actually achieved, the nation's bulk electricity supply system remains at risk of reliability events and price volatility.

Transmission Jurisdiction

     The IBEW agrees that the FERC should make the determination of what specifically constitutes FERC-regulated wholesale grid-connected lines.  The present FERC filings, with respect to proposed FERC Rule 2000, demonstrate the insincerity, in aggregate, of the investor-owned utilities to come to a resolution concerning the questions of participation, governance, and operation of the proposed large Regional Transmission Organizations.  This is a major hurdle to achieving a fair and robust wholesale market.  Congress must deliver the means by which the FERC can move beyond the incremental approach to a workable transmission grid, while honoring current owners' rights and maintaining fairness to users.

Reliability

     In addition to the concerns about an adequate and trained workforce already expressed in IBEW testimony, we believe the NERC/NAERO-based legislation falls short of addressing numerous critical components of system reliability such as a requirement for sufficient and available generation capacity, and rigorous standards for the construction, operation, maintenance and inspection of all electric facilities.  While technical differences are considerable, the current situation with respect to safety and reliability oversight of the natural gas pipeline industry serves as a reminder of the need to provide legislative guidance to restructured industries up front.

Rates and Market Power

     Encouraging energy-intensive industrial facilities to engage in reselling electric power, which was initially reserved for industrial operation, would lead to a number of negative consequences:  lost income and employment of workers, dislocation of local economies, and the lost output of goods and/or services, which would ultimately result in product scarcity with attendance higher prices.  Further, this back-door approach to retail competition subverts the right and due process of state bodies to make these decisions concerning appropriate retail market considerations for themselves.

Regional Planning and Siting

     The IBEW strongly agrees with the regional planning approach which first involves state authorities with the review of need and siting considerations.  This type of mechanism can lead to more innovative and satisfying local solutions, provided the process is encouraged by a federal backstop with the FERC.

Market Transparency Rules

     Workable and fair markets which are equally beneficial to sellers and buyers require availability of the best possible information.  Only strong federal oversight with the ability to levy sanctions can assure this happens.