As regulators continue to investigate industrywide restructuring as an answer to regional electric rate disparities and calls from large consumers for price reductions, the trend of dealing with...
As I began to write this column, the California Public Utilities Commission (CPUC) was slated in less than 30 minutes (this time, for real) to unveil its final proposed plan to restructure the electric utility industry. After the deed was done, on Wednesday, December 20, I logged on to ftp.cpuc.ca.gov and downloaded the text of the two opinions, issued by California commissioners Daniel Fessler and Jessie Knight. But during the two-week delay in California from the original planned release date of December 6, the Wisconsin Public Service Commission (PSC) snuck in under the wire to win the honor of being first. Its restructuring order, issued Tuesday, December 19, beat the CPUC by one day.
Victory. But will Wisconsin claim the trophy?
On December 8, Wisconsin chairman Scott Neitzel fired off an internal memorandum to fellow commissioners Cheryl Parrino and Dan Eastman, giving them a heads-up on ideas he would propose at the PSC's open meeting on December 12 (the original target date for the Wisconsin order). As things turned out, Wisconsin also postponed its final order (em from December 12 to December 19 (em as Neitzel jockeyed for position to bring the "go slow" Parrino and Eastman over to his more aggressive views.
Here's the rub. On the very first page of Neitzel's memo, he paused to quote the comments of one Orval Jenks, of Oak Creek, WI, who spoke at the PSC's public hearing in Milwaukee back in late November. As Mr. Jenks put it, and as Neitzel saw fit to reiterate for the benefit of his fellow regulators, "Success comes from not being the first to give up the old or the last to take up the new."
The One to Read
If you're like me, you have neither the time nor the inclination to read every PUC polemic on electric utility restructuring. I recommend you skip the Wisconsin and California orders, and instead get your hands on a copy of Massachusetts State Senate Report No. 2130, "A Prescription for Competition: The Restructuring of the Electric Utility Industry" (Report of the Senate Committee on Post Audit and Oversight, issued December 4, 1995).
What I like about the Massachusetts Senate Report 2130 is that it agrees with my view (em namely, that electric utilities will not break up into generation, transmission, and distribution. Instead, the Massachusetts Report favors a model (see, "Model VI," table of contents, this issue, p. 4) with a somewhat different set of elements:
s deregulated generation
s centralized dispatch and control (a voluntary pool, with generators selling directly to customers if they choose)
s a regulated "wires business" (transmission and distribution) run by utilities
s a customer service function run by energy service companies (ESCOs) and retail load aggregators in which utilities do not play a role.
The Massachusetts Senate model assumes a regulated distribution function, but with a catch (em no more customer contact. Instead, a new group of brokers, retail load aggregators, and ESCOs would operate as middlemen, coordinating deals and prices between (a) generators and pool dispatchers, and (b) retail customers.
Thus, while the