Senate panel begins debate on power grid bill

WASHINGTON (Reuters) - A Senate committee on Wednesday began voting on amendments to modify a bill that seeks to give the federal government authority to override state objections to expanding the U.S. electricity grid.

The bill under consideration by the Senate Energy and Natural Resources committee would give states one year to provide sites for high-priority national transmission projects.

If states do not decide on a location for a proposed transmission line or reject the development, then the Federal Energy Regulatory Commission will be able to step in.

The panel adopted a measure offered by Republican Senator Bob Corker of Tennessee that would bar FERC from distributing costs that are not "reasonably proportionate to measurable economic and reliability benefits" of a project to a region.

"I don't think that customers that don't benefit in some way in another region ought to be paying for something that's occurring in a different region," Corker said.

Committee Chairman Jeff Bingaman opposed the measure because he said a lot of benefits from new power lines are not easily measured, including increased reliability of the grid.

"This provision would make rolling costs in over a wide area nearly impossible," Bingaman said. "This probably means that costs would only be allocated to purchasers of power."

Lawmakers also debated whether FERC should have power to use eminent domain to seize parcels of private land deemed necessary for power lines. Sen. Robert Menendez, Democrat of New Jersey, offered an amendment to take FERC's eminent domain authority out of the legislation.

The panel rejected that amendment and an amendment offered by Republican Senator John Barrasso of Wyoming that would have prohibited FERC from seizing private property in states where at least 40 percent of land is owned by the U.S. government.

Bingaman said amendments limiting the eminent domain authority of FERC would have effectively "neutralized" the bill.

Bingaman intends to roll the grid legislation into a sweeping comprehensive energy package that will also address establishing a national renewable electricity standard, strengthening appliance efficiency standards, and clean energy investments.

The committee will hold hearings next week on additional aspects of the package, but it is unclear if the panel will be able to meet the goal of approving the full package by the Memorial Day recess.

(Reporting by Ayesha Rascoe; Editing by David Gregorio)