Past hearings have focused on the natural gas and oil pipeline regulatory programs, hydroelectric plant licensing procedures, and alleged ex parte contacts between FERC staff and industry.

During previous investigations of the oil and natural gas pipeline programs the subcommittee uncovered substantial—and strikingly similar-inefficiencies and delays in administrative proceedings at FERC. These problems increased the costs of transactions and impaired the efficient functioning of the affected industries and in some cases unnecessarily raised costs to regulated entities and con

sumers.

In the first session of the 103d Congress, the subcommittee turned to the Federal Energy Regulatory Commission's regulation of wholesale transactions for electric power in the United States. In 1992, the Congress enacted the Energy Policy Act [EPACT] which imposed new duties on FERC by amending the Public Utility Holding Company Act to create new entities requiring FERC certification-exempt wholesale generators. These new entities will likely increase the number of wholesale electricity sellers and transactions requiring FERC action. EPACT also granted FERC new authorities under the Federal Power Act to order utilities to provide access to their transmission facilities. Here, too, FERC's electricity workload will increase as a result of congressional mandates and a changing power market.

The subcommittee was concerned that if conditions found in FERC's regulation of the oil and gas pipeline industries and its hydroelectricity licensing program were also true of the electricity program at FERC, then the reforms contained in EPACT could not be implemented effectively. The subcommittee also investigated whether long-established electricity programs at FERC function efficiently and effectively.

To assist in its investigation of the electricity regulatory program, the subcommittee requested that the General Accounting Office [GAO] undertake a study of the various types of administrative proceedings within FERC's current electricity program to ascertain whether they shared the problems found in the other FERC programs. The GAO studied factors affecting timeliness of FERC actions on electricity applications, the potential effects of EPACT on FERC's workload, and suggested procedural changes to speed up FERC's decisions on applications. GAO also evaluated the prospects for implementation of the new authorities contained in EPACT.

GAO's review and the subcommittee's hearing revealed that, unlike other FERC programs, the electricity program experienced relatively few serious delays and handled most matters on a routine and timely basis. GAO found that prospects for implementation of the new mandates and authorities were uncertain. For the programs already in place, GAO found evidence of effective implementation. For programs not yet implemented, the GAO found insufficient evidence to predict the likely path that the program would take, although the agency was meeting the deadlines imposed by EPACT.

The hearing also focused on several longstanding FERC electricity program controversies such as conflicts between FERC and State public utility commissions which share jurisdiction over elec

tricity regulation. In addition, the subcommittee examined proposals for changes to FERC's procedures, such as the use of regional transmission groups to facilitate transmission transactions and procedural changes which have been suggested to improve the fairness and efficiency of FERC's electricity program.

b. Benefits. The changes made to FERC's electricity program are some of the most sweeping in EPACT. As a result of FERC's new regulatory scheme for electricity, many new entities should enter the electricity market, producing greater competition and lower consumer prices. The effectiveness of FERC's implementation of the electricity regulation program is crucial to its success. It is too early to predict with certainty how well FERC will do in implementing the new programs and authorities granted under EPACT. However, effective implementation will increase competition and ultimately should result in substantial savings to consumers. For this reason, the subcommittee intends to follow FERC's progress in this respect in the years ahead.

c. Hearings. The subcommittee held a hearing entitled “Federal Energy Regulatory Commission's Electricity Regulation Program" on August 6, 1993.

9. EPA's Pesticide Program and Food Safety Reform.

a. Summary.-In an October 1993 hearing, the subcommittee continued its investigation of EPA's progress in reviewing pesticides as required under the pesticide law, the Federal Insecticide, Fungicide, and Rodenticide Act [FIFRA].

The regulation of pesticides is achieved through the "registration" of individual pesticide products. The registration is a kind of license, signifying that the product has been reviewed by EPA, and that at the time of registration, EPA determined that its intended use presented no "unreasonable adverse effects to man or the environment." The registration process is spelled out in FIFRA, enacted in 1947, rewritten by Congress in 1972, with further major amendments added in 1988.

The 1988 FIFRA amendments required, among other things, that the Environmental Protection Agency complete the review of older pesticides by the year 1997. Although this deadline was intended to complete a requirement first imposed on the Agency 20 years ago in the 1972 amendments to FIFRA, in May 1993 the General Accounting Office released a report prepared for the subcommittee which concluded that the 1997 reregistration deadline will not be met and, in fact, will probably not be completed until at least the year 2006.

In addition, during the summer of 1993, the Clinton administration called for major reforms to the Nation's food safety laws. The subcommittee examined the likely effectiveness of these proposals in addressing problems identified by past subcommittee investiga

tions.

Of particular interest to the subcommittee is EPA's progress in reviewing older pesticides, unresolved policy issues underlying reregistration which have significantly delayed progress, recent trends in pesticide use and development, and legislative proposals to amend food safety statutes.

b. Benefits.-Through testimony provided by the General Accounting Office and the EPA Office of Inspector General, and its own investigations, the subcommittee has identified a variety of program management deficiencies which underlie the program's dismal implementation record. Despite a program budget which is over $100 million and growing, the public is still not reassured that all pesticides currently in use are safe.

In response to ongoing subcommittee inquiries and investigations, the pesticide program has attempted to focus management attention on the resolution of key implementation issues which to date have hindered the effective achievement of agency goals and legislative directives. Improvements such as these are essential if the program is ever to complete the reregistration requirements first imposed on the agency in the 1972 amendments to the statute. c. Hearings.-The subcommittee held a hearing entitled, "EPA's Pesticide Program and Food Safety Reform" on October 29, 1993. 10. Benefits and Drawbacks of the Superfund Statute's Liability Provisions.

a. Summary. In its continuing review of the efficiency of the Federal Superfund Program and in anticipation of the upcoming congressional reauthorization of the statute, the subcommittee held the first of several hearings on various aspects of the Superfund Program. The subcommittee's review focused on the benefits and drawbacks of the current Superfund law's retroactive strict, joint, and several liability provisions.

In 1980, Congress enacted the Comprehensive Environmental Response, Compensation and Liability Act, known as Superfund, to protect the public from releases of hazardous substances into the environment. The Superfund law authorizes EPA to compel potentially responsible parties [PRPs] to clean up contaminated sites or to reimburse EPA for its cleanup costs. The law also created a trust fund, financed primarily by fees on industry, to pay for site assessments and for cleanup at sites where PRPs could not be identified or were unable or unwilling to pay. Because the law's liability provisions are retroactive and strict, PRPs are held responsible for cleaning up past contamination, even if they were in full compliance with the laws at the time of disposal.

Because the law's liability provisions are also joint and several, any one PRP can be held liable for the entire cleanup cost, even if that PRP is only responsible for a portion of the hazardous waste at the site. Historically, EPA has focused on seeking cleanup costs from a few large PRPS-so-called deep pockets-and left it to them to find other parties who may have disposed of waste at a site to seek contributions for the cost of the cleanup (third party liability suits).

Superfund critics argue that the existing liability provisions foster enormous additional transaction costs by encouraging extensive litigation against third parties. In addition, companies and municipalities which disposed of only small amounts of hazardous substances at Superfund sites believe that the current liability system unfairly forces them to pay for cleanup beyond their proportional share of the problem. PRPs have also criticized EPA for its administration of the liability scheme, especially as it relates to de

minimis waste contributors, lending institutions, municipalities, and small businesses with limited ability to pay for cleanups.

The subcommittee examined the benefits and drawbacks of the current liability system and evaluated various alternatives to it proposed by a wide variety of groups. The subcommittee heard testimony from advocates of various alternatives, including the Chemical Manufacturers Association [CMA], the Natural Resources Defense Council [NRDC], the National Food Processors Association [NFPA], and Industrial Compliance. These alternatives include a "fair share" or proportional liability scheme under which PRPs would pay for cleanups roughly proportionally to the percentage that they contributed to a site (advocated primarily by CMA). Another approach would largely abandon strict, joint, and several liability in favor of entirely EPA-administered cleanups for pre-1987 sites (advocated by NFPA, among others). The money to fund this alternative would come primarily from various fees on industry. A third approach is a hybrid system which merges aspects of the first two plans by expanding the fund through a pollution tax and allowing companies to become eligible for reimbursement for cleanup of their sites from the expanded fund (advocated by Industrial Compliance).

The subcommittee also heard testimony from witnesses who have been named as potentially responsible parties at Superfund sites and who have paid substantial amounts of money under the current liability system to defend themselves against third-party liability suits. They testified that Superfund's liability provisions often lead to unfair results for companies who have always tried to comply with the law.

Congress recognized, and attempted to address, some of these problems when it reauthorized Superfund in 1986. The Superfund Amendments and Reauthorization Act [SARA] authorized EPA to use a host of settlement tools to reduce additional transaction costs by getting earlier settlements with PRPs. Representatives of the U.S. General Accounting Office [GAO] testified, however, that EPA has not made sufficient use of these tools and has only recently begun to emphasize the need for them.

The subcommittee also heard testimony from a representative of Resources for the Future, an organization that evaluated different approaches to the liability issue based on a set of criteria, including: Speed of cleanup; amount of transaction costs; incentives for voluntary cleanups at non-Superfund sites; use of "due care" in future waste management; fairness; and financial implications for the government, the trust fund, and PRPs. In addition, the subcommittee heard testimony from Rev. Benjamin Chavis, the executive director of the National Association for the Advancement of Colored Peoples [NAACP], concerning the negative effect the exist ing liability scheme has had on minority communities, where a disproportionate number of Superfund sites are located.

Because the administration is currently conducting interagency discussions on liability reform, the subcommittee deferred hearing testimony from the Environmental Protection Agency until the interagency process is complete.

b. Benefits. In addition to outlining for subcommittee members the various liability proposals under consideration by the adminis

tration, the hearing served to examine both strengths and weaknesses of these liability proposals which invariably will receive increased congressional attention over the next year, as Congress sets out to reauthorize the law. In addition, if EPA follows GAO's recommendations to strengthen and expand its use of early settlement tools, the government and PRPs could potentially save millions of dollars in transaction costs associated with Superfund cleanups.

c. Hearings.-The subcommittee held a hearing on November 8, 1993, entitled "Benefits and Drawbacks of the Superfund Statute's Liability Provisions."

11. Reliability of U.S. Isotope Supplies and the U.S. Department of Energy's Isotope Production and Distribution Program.

a. Summary. In 1993, the subcommittee continued its investigation of the financial and organizational problems of the U.S. Department of Energy's [DOE] isotope production and distribution program and the impact of these problems on U.S. isotope supplies. In addition to wide utilization in research and industrial applications, millions of medical procedures every year-including therapies for illnesses such as thyroid disease-are dependent on the availability of isotopes.

In August 1992, the subcommittee held an oversight hearing on the reliability of U.S. supplies of radioactive and nonradioactive isotopes and DOE's isotope production and distribution [IP&D] programs. The subcommittee's 1992 investigation revealed that earlier actions to make the DOE IP&D program financially self-supporting had failed and that despite the importance of reliable supplies of isotopes to medical, industrial, and research users, correction of these problems was a very low priority within DOE.

Since August 1992, new developments in both the United States and Canada indicated that the problems in this program and in reliability of supply are continuing and have in fact been growing worse. The United States imports more than 90 percent of its medical isotopes, as well as industrial and research isotopes, from Canada. Early in 1993, the Canadian Government decided to decommission the only backup reactor capable of making these isotopesleaving the United States dependent on a single Canadian reactor. In addition, DOE's planned expansion of its isotope production capacity was in jeopardy and the financial condition of the DOE İP&Ď program continued to deteriorate.

The previous subcommittee investigation found that DOE did not have any long-range plan for the management and operation of its isotope production, research, and test reactors. However, DOE had committed to provide such a plan by September 30, 1993, and that plan was examined during the subcommittee's December hearing. Unfortunately, the subcommittee found that the plan is fundamentally flawed in that it lacks any detailed information about DOE's future research needs, reactor capabilities and remaining life, or program costs. In addition, despite the aging condition of virtually all of the DOE reactors, the Department's Office of Environment, Safety, and Health never reviewed the report prior to its completion and the report does not incorporate the results of the DOE's own long-range strategic planning activities.