Let's enjoy this brief period of diminished acrimony before implementation of this landmark law.
Peter Fox-Penner is principal and chairman of The Brattle Group, an economic consultancy, and an international expert on energy policy. Contact him at peter.fox-penner@brattle.com.
In a time of record high gasoline prices, war, and increasingly shared global climate concerns, it is lamentable that the Energy Policy Act of 2005 does so little to address these critical issues. Within the narrower context of policies primarily affecting the electric power industry, however, this is a much more significant piece of legislation, and it includes a few accomplishments bordering on the extraordinary.
For more than a decade, Congress has expressed little more than ambivalence on the subject of electricity regulation. Of course, nearly all policymakers professed alliance to the goal of wholesale markets, and to local decisionmaking in matters of retail industry structure. Absolutely everyone favored strengthening electric reliability, and yet Congress stubbornly refused to pass reliability legislation. As the industry weathered its worst crises since the 1930s, from California blackouts to the collapse of Enron, Congress stood on the sidelines.
Congress' inaction cannot be blamed entirely on lethargy or a lack of courage. Underneath the pro-market, pro-reliability talking points shared by all members there lurked deep disagreements over retail deregulation and FERC's authority to force vertical de-integration (or membership in a regional transmission organization [RTO]), impose open access and reliability rules for all bulk power entities, and to oversee and remedy market wrongdoing.