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Market Structure Dominates State Proceedings

Fortnightly Magazine - January 1 1996

Service Co. of Colorado, Docket No. 95I-513E, Decision No. C95-1098, Nov. 11, 1995 (Colo.P.U.C.).

Integrated Resource Planning

The Arkansas Public Service Commission (PSC) has found that long-term integrated resource planning (IRP) under prescriptive regulatory guidelines is no longer the best means of protecting the public interest given increasingly competitive markets and structural changes in the electric utility industry. Accordingly, the PSC declined to adopt the standards for IRP offered under the Energy Policy Act of 1992. The PSC concluded that it must refocus its attention and adapt its practices to reflect the fact that competitive pressures have become more important factors affecting utility management planning decisions. It declined to reopen suspended IRP dockets, and instead required each electric utility in the state to file a copy of its current resource plan. Re Energy Policy Act of 1992, Docket Nos. 94-342-U et al., Order Nos. 4 et al., Oct. 10, 1995 (Ark.P.S.C.).

Generic Investigations

The Nevada Public Service Commission (PSC) has opened a broad investigation of the potential implications of competition in the electric industry. According to the PSC, the Nevada Legislature recently established a subcommittee to study the effects of competition in the generation, sale, and transmission of electric energy and expects a report by August 1996. The PSC said it would issue a final report on its own investigation in June 1996. Seeking comments from all interested parties on a wide range of issues, the PSC began with a review of restructuring decisions issued by regulators in Massachusetts, California, and Maryland. Re Electric Restructuring, Docket No. 95-9022, Oct. 27, 1995 (Nev.P.S.C.).

The District of Columbia Public Service Commission (PSC) has initiated an investigation into electric services, market competition, and related regulatory policies. While emphasizing that under current regulation the District enjoys some of the lowest rates in the nation, the PSC said that "if this fact is to remain true" it must be prepared to take steps to allow greater reliance on competition and customer choice. On the other hand, given the District's unique balance of residential and large office users, the PSC warned that an opening of the monopoly market could put great upward pressure on residential rates if commercial customers are the only ones with a true choice of suppliers. Re Electric Service, Market Competition and regulatory Policies, Formal Case No. 945, Order No. 10720, Oct. 27, 1995 (D.C.P.S.C.).

The Vermont Public Service Board (PSB) has formally opened a full-scale investigation into electric industry restructuring, acknowledging a set of guiding principles agreed upon by a board-based working group convened by the state's Department of Public Service. The key principles are 1) efficiency, to reduce costs; and 2) fairness, to ensure that benefits are distributed equitably among all consumers.

In committing to develop a new regulatory framework that seeks the benefits of "greater market discipline" while "maintaining and enhancing desirable features of the current regulatory system," the PSB pointed to ongoing developments in the wholesale markets, including efforts by the New England Power Pool to reconsider fundamental aspects of membership, planning, and dispatch of generation in the region, as well