Bush favors delay in FERC proposal on power grid management

WASHINGTON -- The Bush administration supports a three-year delay in a controversial proposal that its supporters claim would make it easier to run the nation's electrical system, the president's top energy adviser said Sunday.

Energy Secretary Spencer Abraham said the proposal would "force down the throats" a federal policy of deregulation that states with cheap power oppose.

The Federal Energy Regulatory Commission proposal would establish national standards for managing the flow of electricity through regional transmission organizations. It also would establish some new rules on access to transmission lines.

Abraham said many states don't want the federal government telling them how to run their electrical systems.

"The (FERC) measure ... goes to the question of whether or not we would mandate and force down the throats of regional areas of the country a federal approach to deregulation of the marketplace," Abraham said on Fox News Sunday.

The proposal faced strong opposition in Congress even before last week's massive power outage across all or part of eight states.

Opponents argue that the blackout occurred in a region where just such a type of grid management has been touted. State regulators in the Northeast have strongly supported national standards, known as "standard market design."

The opposition is led by southern states, where electricity prices already are low without deregulation, and those in the Northwest, where officials mistrust FERC, which they argue did nothing to prevent soaring power prices two years ago when California's deregulated system turned to chaos.

"Deregulation has left us without adequate consumer protection and safeguards like reliable service and protection from market manipulation," said Sen. Maria Cantwell, D-Wash.

But FERC chairman Pat Wood said the cascading blackout Thursday showed the need for better management of the system, with national standards.

"The cascading nature of the of this blackout offers an object lesson of how the electricity grid requires regional coordination and planning, a challenge the nation is still striving to meet," he said.

The Senate was considering an energy bill that included a two-year delay in the FERC proposal. That bill was scrapped when senators could not agree on other issues in the bill. Instead, the Senate last month approved legislation that ignores the FERC proposal.

Given the events of the last few days, lawmakers are expected to debate the issue and approve some delay when they return next month to consider energy legislation.