Newspaper article The Christian Science Monitor

Quiet Little Wars Rage over Omnibus Budget Bill

Newspaper article The Christian Science Monitor

Quiet Little Wars Rage over Omnibus Budget Bill

Article excerpt

THIS week, a House-Senate conference committee will begin the Herculean task of forging a compromise "Omnibus Budget Reconciliation Act of 1993."

Most of the public's attention will focus on the "reconciliation" part of the title - an attempt to bring federal spending and revenues in line with the president's goal of $500 billion in deficit reduction over five years. But arguably just as important is the word "omnibus," which points to the vast variety of measures included in the legislation. The House-Senate conferees will have to resolve major differences not only on energy taxes and Medicare cuts but also over bovine growth hormones and tax breaks for Indian reservations.

One of the more-heated, but little-noticed, conference battles will be over a provision that has triggered a lobbying war between rural electric cooperatives and city-owned utilities. The measure, inserted into the bill by Rep. Glenn English (D) of Oklahoma, would prevent cities from staging hostile takeovers of rural electric co-op facilities. The federal government already prevents hostile takeovers of rural sewage and water services.

The issue is an "emotional hot-button" for many of the nation's 1,000 rural electric co-ops, says Richard Larochelle, a lobbyist for the National Rural Electric Cooperative Association in Washington. Under state provisions, many cities have annexed adjoining territory and then used "eminent domain" laws to take over electric facilities originally set up by customer-owned co-ops with the help of federally subsidized loans.

"The co-ops work hard to develop rural areas ... where no municipal utility company is willing to invest," Mr. Larochelle says. "Then a city comes in and grabs the developed area for itself. It violates the idea of fairness. It's an arrogant use of government power."

Not surprisingly, municipal utilities see the situation in a different light. They argue that the federal government should not preempt 50 state statutes that regulate these utilities' territorial rights.

"What's being attempted is that co-ops would like to freeze the territory to avoid competition from other utilities," says Larry Hobart, executive director of the American Public Power Association, which represents 1,700 municipal utilities. "But the country is becoming more urban. Annexations are a natural response to the desire of people on the fringes of municipalities to get city services."

That the territorial provision was included at all in the House reconciliation bill is a tribute to one congressman's ability to stretch the parliamentary rules. Normally a reconciliation bill is only supposed to meet deficit-reduction goals. It's not designed to conduct substantive legislative business.

BUT Representative English got around that obstacle with an ingenious argument: Rural electric co-ops receive federal subsidies ($117. …

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