The Honorable Billy Tauzin
Chairman
Committee on Energy and Commerce
U.S. House of Representatives
2125 Rayburn House Office Building
Washington, DC 20515-6115

Dear Mr. Chairman:

As the conference committee prepares to consider H.R. 4, Securing America's Energy Future, the Coalition of Northeastern Governors (CONEG) would like to share with you the Governors' perspectives on the essential components of effective national energy legislation.

The Northeast is uniquely dependent upon imported energy, particularly heating oil, gasoline and natural gas, both from domestic and international sources. As a result, the region is strongly committed to the security and reliability of the nation's energy supplies and energy infrastructure, and to investments in energy efficiency and renewable energy.

The Governors recognize the tight budget constraints faced by Congress, but firmly believe that federal investment in energy efficiency and renewable energy is a wise decision – one that will decrease the nation's reliance on foreign sources of energy and provide numerous economic, environmental and health benefits. Significant incentives for the research, production and use of renewable energy should be encouraged.

Federal funding and tax policy should provide appropriate, targeted initiatives and incentives for investments in conservation, energy efficiency, and demand response solutions to the growing energy demand and supply imbalance. Targeted initiatives and incentives should also be provided for investment in efficient and clean fueled transportation systems.

The Governors applaud both the House and Senate for recognizing the importance of the Low Income Home Energy Assistance Program, Weatherization Program, and State Energy Program by increasing the authorization levels. We urge Congress and the Administration to work to ensure that funds are appropriated at these higher levels.

Reliability throughout the nation's electric system remains of the utmost concern to the Northeast Governors. Any reliability provision in the final energy bill must preserve the states' authority to take action to ensure the safety, adequacy, and reliability of the electric service within that state, especially during emergency situations. At the same time, the Federal Energy Regulatory Commission should have the authority to ensure that any state-issued rule would result in the same or greater reliability as that provided by national reliability standards, and would not impede the development or operation of efficient wholesale electricity markets.

Federal policies, programs and regulations should encourage concurrent consideration of environmental, energy and transportation policies and objectives. This concurrent consideration is particularly important as Congress considers a national phase-out of MTBE as a fuel additive and the use of substitutes. Many of the Northeast states have moved to phase-out the use of MTBE as a gasoline additive. CONEG supports federal action to phase-out MTBE, but believes more research is needed on the effect of an MTBE ban and use of alternative additives on the environment and the supply and price of gasoline in the U.S. At the same time, consideration should be given to the impact of federal tax policy for alternative fuels on the federal government's ability to invest adequately in the nation's surface transportation system.

CONEG commends the efforts of the conference committee to provide safety, security, and reliability to the nation's energy supply through this essential legislation.

Sincerely,

Identical letters were sent to each House and Senate Energy Conferee member.