===================================
EEI DAILY ENERGY NEWS
Visit the DEN online at www.eei.org/products-den
to subscribe, view archives and more.
===================================
Monday, May 3, 2004

TOP STORY

* Senate to Debate FSC/ETI Bill With Energy Tax Provisions
The Senate is scheduled today to resume debate on the FSC/ETI 'JOBS'
tax bill (S. 1637), which includes the energy bill's tax incentives.
Among the amendments to be considered: a measure to reduce the
depreciable lives of transmission assets from 20 years to 15 years ...
more.

TODAY'S HEADLINES

Energy Policy
* Senate to Debate FSC/ETI Bill With Energy Tax Provisions

U.S. Electricity Business
* Class-Action Petition Filed at Utah PSC Against PacifiCorp
* PPL Expands BPL Test to Fourth Community in Pennsylvania

Energy Infrastructure & Supply
* Duke Energy Faces First Hurdles for Morro Bay Rebuilding Project

Energy & The Environment
* PPL Plant at Martins Creek Shifts to Low Sulfur Fuels
* Coal-Fired Plants Top Polluters in Ohio, State Assessment Finds

Opinions
* Jeffords Says Bush Administration Undermining Clean Air
* Affordable Energy Official Says Post Wrong to Oppose Energy Bill
* Ohio Markets Remain Severely Underdeveloped, Plain Dealer Writes

Briefly Noted
* NRC Says Davis-Besse Can Keep Operating License

EEI News
* EEI President Highlights Industry's Reliability Actions, Stresses Need
for Legislation

ENERGY POLICY

* Senate to Debate FSC/ETI Bill With Energy Tax Provisions

The Senate is scheduled today to resume debate on the FSC/ETI 'JOBS'
tax bill (S. 1637), which includes the energy bill's tax incentives.
Among the amendments to be considered: a measure sponsored by Sen.
Don Nickles, R-Okla., and Sen. Craig Thomas, R-Wyo., to reduce the
depreciable lives of transmission assets from 20 years to 15 years -
a provision considered critically important by the electric industry.

Energy Daily reported, "In a strong show of solidarity, more than 100
energy companies and national organizations sent a letter to [Senate
Majority Leader Bill] Frist and [Senate Minority Leader Tom] Daschle
Friday urging Senate approval of the energy tax provisions." EEI
signed the letter and also sent its own letter (as reported in the
April 30 DEN (http://www.eei.org/products_and_services/nonav_product_access/dailyenergynews/issue/20040430.htm).)

The newsletter reported that Senate leaders are trying to "pare down"
a list of some 80 amendments that may be offered to the bill under the
agreement that allowed for the addition of the energy tax provisions.
An amendment by Sen. John Kyl, R-Ariz., would strip the energy
language from the bill, though it is not expected to pass. According
to Energy Daily, Sen. John McCain, R-Ariz., may direct some of his 20
reserved amendments at the energy tax title.

Though passage of the bill is needed to avoid retaliatory tariffs on
U.S. exports following a ruling by the World Trade Organization, the
newsletter suggested the bill still faces a tough battle:

"Frist has had considerable trouble moving the bill because Democrats
have insisted on offering amendments that would force Republicans to
cast politically embarrassing votes. The Senate twice has defeated
efforts to close debate on the measure, forcing the GOP leader to
shelve it temporarily. Without a deal to limit amendments, Frist may
be forced to pull the bill once again."

-- Energy Daily, May 3.

>> Read EEI's letters to Sen. Frist
(http://www.eei.org/about_EEI/advocacy_activities/Congress/EEI_FSC-ETI_Frist.pdf)
and Sen. Daschle
(http://www.eei.org/about_EEI/advocacy_activities/Congress/EEI_FSC-ETI_Daschle.pdf)
supporting S. 1637's energy tax incentives and the Nickles-Thomas
amendment.

U.S. ELECTRICITY BUSINESS

* Class-Action Petition Filed at Utah PSC Against PacifiCorp

A class-action petition has been filed with the Utah PSC by two Salt
Lake City attorneys who want Utah Power's parent, PacifiCorp, held
responsible for regional power outages that occurred during a winter
storm at the end of 2003, the Ogden Standard-Examiner reported on
Saturday.

One of the petitioners, former PSC Commissioner David Irvine, was
quoted by the newspaper as saying: "We're asking them to determine
whether the length of the outage was due to organizational changes
within PacifiCorp. The company can move its corporate pieces around
however it wants, but it can't degrade its service to Utah
customers."

Wrote the newspaper: "The action is technically not a lawsuit since
it was filed with a regulatory agency rather than a district court,
but the PSC will have authority to fine the company if it concludes
the outage was not a major event attributable entirely to the
weather, commission spokeswoman Julie Orchard said."

-- Ogden Standard-Examiner, May 1.

* PPL Expands BPL Test to Fourth Community in Pennsylvania

PPL Corp. has expanded its experiment with BPL (broadband over power
lines) into Upper Macungie Township, Pa., the Allentown Morning Call
reported on Sunday. Earlier trials have been conducted in Whitehall
Township, Emmaus and Hanover Township, all in Pennsylvania. PPL has
set a base price of $40 per month for the service.

David Kelley, president of PPL TelCom, was quoted by the Morning Call
as saying: "We're meeting with very good results ... and that's the
reason we're expanding."

-- Allentown Morning Call
(http://www.mcall.com/business/local/all-pplmay02,0,5044069.story),
May 2.

ENERGY INFRASTRUCTURE & SUPPLY

* Duke Energy Faces First Hurdles for Morro Bay Rebuilding Project

Duke Energy faces the first of a series of hurdles this week in its
plan to modernize the half-century old Morrow Bay power plant in
California and increase its output to 1,200 MW from 1,002 MW, the San
Luis Obispo Tribune reported on Sunday. On Wednesday, the California
Energy Board will conduct a hearing on a permit for the rebuilding
process. Later this year, the Regional Water Quality Control Board
will review a Duke application to use recycled seawater in the
facility and to mitigate its impact with a habitat revitalization
effort.

The California Coastal Commission has been pushing for the plant to
be rebuilt with a dry-cooling system that utilizes fresh water and
cooling fans that the power company believes are impractical, the
report said. Wrote the Tribune: Duke "will not build the new plant
if that cooling method is mandated. The City of Morro Bay also
opposes dry cooling because the fans and radiators it would require
would be noisy and unsightly from the Embarcadero."

Duke Energy spokesman Pat Mullen was quoted by the Tribune as saying:
"We will make our decision whether to go forward with the project
only after we get our permits. In making that decision, we will look
at permit costs, demand for electricity, regulatory stability and
our ability to get contracts for the power output."

-- San Luis Obispo Tribune
(http://www.sanluisobispo.com/mld/sanluisobispo/8572872.htm),
May 2.

ENERGY & THE ENVIRONMENT

* PPL Plant at Martins Creek Shifts to Low Sulfur Fuels

On Saturday, coal- and oil-fired units at the Martins Creek power
plant began using low-sulfur fuel as a result of a settlement between
PPL Corp. and the EPA. The reduction of SO2 is expected to hit 20
percent from the pair of coal-fired units, the Allentown Morning
Call reported on Saturday, while the two oil-fired units will shave
30 percent off of SO2 emissions.

A 600-MW natural gas-fired plant adjacent to Martins Creek was
reportedly expected by PPL to go into service in the next few weeks.

-- Allentown Morning Call, Local, pg. B-1
(http://www.mcall.com/news/local/all-5ppl-rmay01,0,1562474.story),
May 1.

* Coal-Fired Plants Top Polluters in Ohio, State Assessment Finds

Nine of the 10 top air-pollution sources in Ohio are coal-fired
power plants, the Ohio EPA said in its annual Toxic Release
Inventory, the Akron Beacon Journal reported on Saturday. Wrote the
newspaper: "No. 1 was FirstEnergy Corp.'s Sammis Plant in Jefferson
County, with 13.1 million pounds of air releases, mostly acid
gases."

FirstEnergy spokeswoman Ellen Raines said pollutant releases were up
significantly from 2001, the newspaper wrote, "because FirstEnergy
burned more coal at Sammis and because it used a new means of
gauging its releases."

-- Akron Beacon Journal, pg. B-3, May 1.

OPINIONS

* Jeffords Says Bush Administration Undermining Clean Air

Sen. James M. Jeffords, I-Vt., the ranking minority member on the
Senate Environment & Public Works Committee, wrote in a letter to
the editor of the New York Times that the Bush administration has
done little more than try to "undermine" the chances of a national
clean air bill becoming law.

Jeffords' letter takes issue with a David Brooks column in the Times
(April 20) that suggested Jeffords was acting to block a bill that
would control power-plant pollution.

"I want a strong, comprehensive measure and have repeatedly announced
my willingness to negotiate to achieve that end," Jeffords wrote.
"There is nothing left on the table to negotiate. It is extremely
difficult to block something that has zero momentum and no one
pushing it."

-- New York Times, Letter to the Editor, pg. A-14, May 1.

* Affordable Energy Official Says Post Wrong to Oppose Energy Bill

Paul C. Oakley, executive director of the Coalition for Affordable and
Reliable Energy, wrote in a letter to the editor of the Washington
Post that, while there is a drive on to improve the reliability of the
power grid through mandatory rules, that's not enough.

"The other steps needed - such as encouraging investment in our
electric transmission infrastructure and making it easier to site and
build new power lines - are contained in national energy legislation
the Post urged Congress to abandon," Oakley wrote.

Said Oakley: "Congress must pass a comprehensive energy bill that,
in addition to improving electricity reliability, increases domestic
production capabilities, modernizes and expands the energy
infrastructure, promotes the development of new energy technologies,
encourages energy conservation and efficiency, and reduces
over-reliance on foreign energy. Without it, America will continue to
careen from one energy crisis to another."

-- Washington Post, Letter to the Editor, pg. A-20
(http://www.washingtonpost.com/wp-dyn/articles/A58104-2004Apr30.html),
May 1.

* Ohio Markets Remain Severely Underdeveloped, Plain Dealer Writes

With deregulation of the Ohio energy market just 20 months away, the
market remains "severely underdeveloped," wrote the Cleveland Plain
Dealer in an editorial published on Saturday. "Imagine the outrage if
the Public Utilities Commission of Ohio rejects FirstEnergy's plan
and the only suppliers turn out to be FirstEnergy subsidiaries
offering new rates that are sky high. If the PUCO members aren't
having nightmares about that, they should be."

Wrote the Plain Dealer: "Maybe competition will emerge when the
wholesale markets become robust, an issue that the Midwest
Independent Transmission System Operator hopes to repair. Maybe
competition can be stirred up by giving customers more incentives to
shop and create a market."

-- Cleveland Plain Dealer, Editorial, pg. B-8, May 1.

BRIEFLY NOTED

* NRC Says Davis-Besse Can Keep Operating License

The NRC denied the second of two peitions that sought the suspension
of Davis-Besse's operating license on the grounds that FirstEnergy
provided insufficient documentation about the plants operations, the
Toledo Blade reported. The petition was filed by Greenpeace, the Union
of Concerned Scientists, and the Nuclear Information & Resources
Service.

-- Toledo Blade, April 30.

EEI NEWS

* EEI President Highlights Industry's Reliability Actions, Stresses Need
for Legislation

EEI president Tom Kuhn, in a President's Message in the May/June issue
of Electric Perspectives, reiterated the industry's commitment to
enhancing reliability and listed accomplishments it has made since the
August blackout. While supporting voluntary efforts at NERC, Kuhn
stressed the need for comprehensive national energy legislation as a
long-term answer to reliability issues.

Kuhn pointed to a number of NERC actions to strengthen reliability,
including:

- readiness audits of 20 of the largest control areas in North America
by June 30;

- interim guidelines for the disclosure and reporting of reliability
violations and audit results;

- commitment to transform NERC's operating policies into standards by
the end of 2004;

- 'compliance templates' to enhance NERC's audit program and facilitate
reporting and disclosure activities;

- requirement that all transmission owners annually certify their
vegetation management efforts and report all vegetation-related line
outages; and

- other initiatives to improve operator training, grid management and
controls, and system modeling and planning.

Noting compliance with reliability rules is currently voluntary, Kuhn
said comprehensive energy legislation is needed. In addition to
establishing mandatory, enforceable reliability rules, this legislation
would encourage companies to invest in new transmission facilities by
removing barriers to investment, including the Public Utility Holding
Company Act; amending the U.S. tax code; granting FERC limited
backstop siting authority; streamlining and simplifying the federal
transmission permitting process; and requiring FERC to provide
investment incentives for transmission.

Concluded Kuhn: "We need to support NERC's near-term measures, but we
also need to keep energy legislation at the top of our list. After all,
reliability ... is this industry's highest value."

>> Read 'Strengthening Reliability'
(http://www.eei.org/magazine/editorial_content/nonav_stories/2004-05-01-prez.pdf)
from the new issue of Electric Perspectives.

New from EEI:
Read the latest issue
(http://www.eei.org/industry_issues/environment/nonav_EnviroWeek/index.htm)
of EEI's EnviroWeek for in-depth coverage of environmental news, events, and policy
developments.

===================================
Sign up at www.eei.org/products-den for e-mail delivery of the
EEI Daily Energy News - free of charge to EEI electric company members.
Non-members may subscribe at www.eei.org/products

For additional features, access the new web version of the DEN at
www.eei.org/products-den

Questions or comments? Please contact the EEI Electronic Subscriptions
Department at eeionline@eei.org or 202-508-5005.