The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“ELECTRIC UTILITY RESTRUCTURING” mentioning the U.S. Dept. of Energy was published in the Senate section on pages S1961 on Feb. 24, 1999.
The publication is reproduced in full below:
ELECTRIC UTILITY RESTRUCTURING
Mr. KERREY. Mr. President, last year, Senator Gorton and I introduced a bill that addressed a growing problem faced by local governments in the new era of state electric utility restructuring. That bill had the bipartisan co-sponsorship of almost a dozen Senators.
On February 6, we reintroduced this legislation as the Bond Fairness and Protection Act. This bill will ensure Nebraskans continue to benefit from the publicly-owned power they currently receive. Nebraska has 154 not-for-profit community-based public power systems. It is the only state which relies entirely on public power for electricity. This system has served my state well as Nebraskans enjoy some of the lowest rates in the nation.
Approximately 18 states have already moved toward permitting new competition in the electric industry. However, the federal tax rules governing municipal bond financing did not anticipate the new era of electric utility restructuring when they were crafted more than a decade ago. If Congress does not act, public power systems that open their transmission lines to privately owned utilities can jeopardize the status of their outstanding tax-exempt bonds. The legislation my colleagues and I introduced is an equitable solution to the problem.
Under this legislation, local governments determine how their future municipal power debt will be treated. According to the US Department of Energy, my own state had over $2.2 billion in outstanding municipal power bond debt in 1996. Our bill protects local governments that issued public power bond debt in the past, yet gives them the flexibility to issue new, but fully taxable debt if they choose to build any new power generation facilities in the future.
Specifically, our legislation provides them with an option: they may either choose to operate under current, so called ``private use'' rules in our tax code. Or if they prefer, they can choose to make a one-time irrevocable election that will allow them to build new power generation facilities if they want, but only using fully taxable bonds instead of tax-exempt financing.
It is important we recognize and respect local governments may face unique situations in public power financing issues as the electricity market changes, and we give them reasonable and fair choices.
Congress may or may not choose to move forward this year on the larger and more complex issues involved in restructuring the electricity marketplace. But I feel we must act to solve this special problem this year. Our local governments should not face unfair retroactive bond taxation triggered by old federal tax rules in conflict with the new state-mandated laws or regulations.
This legislation weighs the interests of local governments, bondholders, consumers, and public and private utilities. It will enable Nebraska public power systems to make decisions in the best interests of their consumers and protect the reliable, affordable electric service that Nebraska currently enjoys.
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