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Republican leaders aim for energy deal next week

By Chris Baltimore

WASHINGTON, Sept 25 (Reuters) - Republican leaders want to wrap up negotiations on a wide-ranging energy bill by the end of next week despite a lack of consensus so far on electricity grid rules and ethanol fuel -- two of the most contentious issues, a Senate aide said on Thursday.

"It is our intention to have a conference meeting at the end of next week, on Thursday or Friday," Senate Energy Committee staff director Alex Flint told reporters. "I assume we will resolve all matters at that meeting."

Negotiators will meet through the weekend and release drafts early next week on electricity and ethanol, the only remaining major issues where Republican leaders have not detailed their bargaining positions.

They will also have to decide whether to leave in a provision to drill in the Alaska National Wildlife Refuge, which Senate Democrats say could derail the energy bill.

Democrats have complained that Republicans have locked them out of the bill-writing process.

Flint said a series of meetings were held for staff from both parties over the past two weeks to discuss the Republican-written drafts. "We have gone through extraordinary lengths to be open and inclusive," he said.

Electricity restructuring has become more important since the Aug. 14-15 blackout that left 50 million people without power.

Rifts between House and Senate Republicans have emerged regarding a controversial plan by the Federal Energy Regulatory Commission (FERC) to create super-regional power grids to coordinate electricity flows.

Sen. Pete Domenici, the head Senate negotiator, supports delaying FERC's plan until 2007, holding with a White House-brokered deal he made with Southern lawmakers who object to the plan as a federal power grab.

Rep. Billy Tauzin of Louisiana, Domenici's House counterpart, says FERC should be allowed to move forward with its plan, but without mandatory requirements for utilities to join grid groups.

A compromise is in the offing, the Senate aide said. "There's nothing in (the electricity package) that I see as a deal-killer at this point," Flint said.

A separate deal on ethanol fuel for vehicles fell apart this week, Flint said, requiring leaders to go back to the bargaining table.

The House has already voted to give methyl tertiary butyl ether (MTBE) -- a gasoline additive -- and renewable fuels like ethanol limited protection against liability lawsuits. But a previously passed Senate bill would ban MTBE in four years, and provide a liability shield only for other renewable fuels.

Once an energy bill is finalized by negotiators, it must go back to the Senate and House for approval before it can be signed into law by the president.