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Industry group calls for time-out as Congress considers electricity legislation

NASHVILLE, March 4, 2003 — Glenn English, chief executive officer of the National Rural Electric Cooperative Association, Tuesday voiced concern about the Congressional leadership’s timing and content of national legislation to restructure the electric industry.

“Congress should pass energy legislation that contributes to our nation’s security but Congress should take a time-out on electricity,” said English. “They should take time to review the failed deregulation schemes of recent years and adopt a new approach, one that brings reliability and stability to an industry under fire — reliability and stability for investors and consumers. Such an approach, he said, “would help restore faith on both Wall Street and Main Street.”

“The federal government is radically transforming the wholesale power marketplace and putting increased pressure on the national power transmission system,” English told more then 12,000 co-op leaders gathered here. “It will take all the resources available at the Federal Energy Regulatory Commission (FERC) to ensure that consumers benefit. Congress must not, at this critical juncture, enact any law to prohibit or otherwise prevent federal regulators from protecting consumers. Not only does the Federal Energy Regulatory Commission (FERC) have the authority today to do much of what Congress currently proposes,” said English, “the Commission has the flexibility to respond quickly to evolving conditions and the expertise to anticipate the consequence of its actions. The same cannot be said of any rigid congressional mandate. Congress must not force FERC to enact regulations that the Commission has determined to be unjust and unreasonable.”

English questioned the wisdom of Congress legislatively undercutting the authority regulators already have. “At best the legislation currently under consideration would hamper FERC’s ability to regulate effectively,” he said. “At worst it will force the Commission to take regulatory actions that are simply unnecessary or have failed the Commission’s “just and reasonable” test.

The association warned Congress not to:

* Require the commission to adopt incentive transmission rates that increase the cost of electricity to consumers without improving service.

* Codify an inflexible approach to funding needed new transmission infrastructure that discourages critical investment and reinforces existing market power.

* Deprive FERC of its existing authority to ensure utility mergers are in the public interest.

* Distract FERC from its core mission by unnecessarily expanding its jurisdiction over consumer-owned utilities.

More than 12,000 representatives from cooperative electric utilities across the nation are attending the NRECA Annual Meeting, March 2-5, at the Gaylord Entertainment Center, during which they will set NRECA’s legislative and organizational agenda for 2003. In addition to considering and acting upon policy resolutions, delegates receive reports from NRECA officials, hear addresses by key public figures and business experts, and attend panel sessions on major issues affecting electric cooperatives and their consumer- owners.

NRECA is the national service organization that represents the nation’s more than 900 consumer-owned electric cooperatives, which provide electric service to more than 36 million people in 47 states. Visit our Web site at http://www.nreca.org .