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On Monday, August 6, 2001 a National Governors’ Association ("NGA") Committee on Natural Resources voted to recommend an energy policy plan, including transmission issues, for adoption by the governors. The governors will vote whether or not to adopt the plan on August 7, 2001, during their annual meeting. The Comprehensive National Energy Policy ("CNEP") recommended by the NGA Committee on Natural Resources states that energy issues should be addressed nationally, but still recognizes the need for state and local authority over environmental and energy matters. The CNEP declares that the governors support a national energy policy based on ten principles, including: promotion of "conditions in the federal and state regulatory context that recognize the unique and complementary roles of federal, state and local governments"; recognition of "the authority of states, tribes, and local communities in decisionmaking"; "support the production and use of domestic renewable energy sources"; and recognition "that states are part of an integrated energy system and partners with nearby states in developing regional solutions." In particular, the CNEP addresses the issue of energy transmission. The CNEP opposes preemption of "state and local authority over siting of electricity transmission networks." While the governors concede that cooperation between federal and state governments could improve competition and reliability, the CNEP seeks to maintain state and local authority over transmission. The CNEP concedes only that the governors will "engage in a dialogue with the federal government and industry" over transmission issues, but only to the extent that the federal government does not intrude on state and local authority over transmission siting. Further, the CNEP declares that the transmission system in the United States must be upgraded and expanded in order for the transmission and distribution networks to be adequate "to move energy from the source to the consumer." In that regard, the governors support recognizing that the states are responsible for timely permitting, siting and licensing decisions and to encourage states to work together towards identifying needed energy transmission and generation projects. The governors further encourage market-based infrastructure investment in transmission capacity and distribution generation, and a requirement that the federal government cooperate with states in licensing, permitting and constructing of natural gas pipelines. The CNEP also states that the governors support complete utilization of existing rights of way for energy transmission. The CNEP also addresses regulatory and environmental issues. The CNEP states that a partnership should be formed between the federal government and the states to effectuate the participation of state and local governments in the development of national policies. The CNEP also states that there should be no preemption of state regulatory authority over the regulation of utilities or the exploration and development of energy. The CNEP goes on to note that state utility commissions should continue to have authority over utility mergers, retail energy rates and ratemaking. The CNEP also urges Congress to pass legislation, in the form of a market-based program, to reduce and cap sulfur dioxide, nitrogen oxides, and mercury emissions and provide for voluntary reductions of carbon dioxide from electric power producers. Under the heading of energy conservation, the CNEP urges the federal government to create incentives for energy providers to furnish methods by which consumers can mitigate their energy requirements in response to price fluctuations. The CNEP also states that the governors support federal policies and incentives that encourage reliable, affordable, and clean energy supplies. The governors also support federal policies that encourage capital investment, protect current production and promote marginal production as well removing barriers that discourage efficient technologies, the development of renewable energy resource and fuel diversity. The NGA was formed to create a mechanism through which the governors of the 50 states, 3 territories and 2 commonwealths collectively influence national policy. On Tuesday, August 7, the NGA announced that it is forming a task force with the Department of Energy to examine how energy markets are regulated and determine which most efficiently deals with increasing regional competition.
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