Jump-Starting the Energy Bill

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Before breaking for the annual August recess, the House and Senate passed separate energy bills. When Congress returns, a conference committee will attempt to iron out the differences. It should not delay.

A big hurdle is disagreement over how best to improve the antiquated electricity grid. The Federal Energy and Regulatory Commission (FERC) wants to give control of power transmission lines to a series of government-run regional transmission organizations (RTOs). It argues that such transmission centers would provide for easier sharing and more reliable transmission of electricity.

The Bush administration prefers a plan to enact mandatory federal reliability standards, to be enforced by the North American Electric Reliability Council, an industry association.

FERC's plan makes sense. But Congress is split along regional lines: Power companies in the South and Pacific Northwest didn't undergo much deregulation in the 1990s. States in those regions get electricity at lower cost - thanks, in part, to their numerous hydroelectric plants. Believing that RTOs threaten their cheaper systems, they're at legislative odds with the Northeast and Midwest, which underwent extensive deregulation separating their power plants from their transmission lines.

The proposed RTOs would operate transmission lines independently, meaning powerful multistate utilities (such as those in the South) would no longer control prices. That continues a market-oriented approach begun in 1992, when Congress opened up the power grid to sales by competing power companies. Such an approach is the best way to ensure sufficient investment in needed generation and transmission equipment.

Sen. Richard Shelby (R) of Alabama wants to delay the FERC plan's implementation by three years. But the need to modernize the system and expand it to meet growing demand should trump such parochialism. Renewal of the system must begin now.

Finding compromise on a comprehensive energy bill will be difficult. The bill could be further delayed by arguments over oil and gas exploration and drilling in the Arctic National Wildlife Refuge in Alaska and fuel-efficiency standards for automobiles. But Congress should not leave town this fall until it finishes the job.