House-Senate conferees yesterday dropped President Carter's proposed federal standards for the setting of electricity rates, but agreed to give the federal government some say in the rate-making process for the first time.
Their compromise was reached after four days of negotiating. It would require state regulatory commissions to consider the energy-saving standards Carter proposed, but it would be left to state commissions to decide whether power companies should be required to comply with the standards.
"It's a loss," said Rep. Philip R.Sharp (D-Ind.) who had helped write the President's program into the House bill. "But I think this will help speed up the process. It's a first step."
As part of his energy package to reduce dependence on foreign oil, Carter had proposed to require electric utilities to take a number of steps to save energy, provide more equity in rates and reduce the need for more generating capabity.
He proposed that power companies be required to give cheaper "time of day" rates to customers who use home appliances late at night or early in the morning to reduce peak demands. He proposed that the companies offer seasonal rates and special rates for service that may be interrupted. And he requested an end to the practice of giving cheap rates to big users, which he said encourages waste.
Electric utilities accounts for more than one-quarter of the nation's fuel consumption. And, unless the change their ways of doing business, it is estimated that they must spend $250 billion over the next decade building new generating capacity to meet peak demands.
The House, whose Commerce Committee had made a two-year study of the subject, approved Carter's proposals. But the Senate turned it down. The electric power companies, which fear delay in getting new rate structures approved under Carter's plan, apparently were caught napping when the bill went through the House. But they applied plenty of pressure in the Senate.
The Senate Energy Committee turned down Carter's proposals, saying it is an area of traditional state jurisdiction, and that the ideas were too new to order into effect without much experience on a voluntary basis.
Under the conference agreement, the Department of Energy would be permitted to intervene in state regulatory proceedings to urge that the standards be put into effect and could appeal a decision by a state commission.
Still before the conferees are the main points of disagreement between the House and Senate on energy legislation. These include the major new energy taxes that Carter proposed and the House approved but the Senate's rejected, on crude oil, continuing industrial use of oil and natural gas instead of coal, and gas-guzzling cars.
They also include Carter's plan to keep price controls on natural gas but at a higher maximum than now. The House approved this but the Senate voted to deregulate gas prices.
The conferees now do not expect to complete all their work until sometime next month.