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Senate Panel Continues Inquiry into Electricity'sw Future
Johnston suggested that large industrial users meet with utilities to define stranded costs. Without a definition, there will never be competitive benefits, he said. "If we knew what the rules of the road were, in a lot of instances, you wouldn't even need retail wheeling because you'd know what your obligation is. You could go make the deal with your utility and be able to do it without going through the PUC... much as they did with natural gas."
Johnston, who seems to favor utility and stockholder interests, noted that stockholders "invested in utilities because they were safe stocks - not so much upside potential. But they bargained away the upside potential in order to get the solidity, the predictability, the conservative nature of utility investments."
The panel's retail wheeling debate also offered little consensus.
"In the United States, consumers can shop for almost anything, but you can't shop for electricity," said Roger F. Naill of AES Corp. and the National Independent Energy Producers. "If you give consumers information and choices, they won't need a lot of this regulation to protect their interests. They will be able to protect themselves."
But Glenn English of the National Rural Electric Cooperative Association argued that the wholesale power provisions of the 1992 Energy Policy Act were still being played out. He questioned whether retail wheeling should be allowed to short-circuit the Act.
"Different states are coming up with different approaches," he said. "They have their own definitions as to what retail wheeling may be. And fortunately, that's exactly what the 1992 Act intended.... It recognized the fact that not all the good ideas come from Washington, DC." English pointed out that cooperatives in Oklahoma supported a wheeling bill in their legislature; those in Colorado opposed a similar bill.
Despite panel efforts to take on other issues, the three-way dance between Johnston, Jackson, and Mehra seemed to dominate. One (edited) exchange:
Johnston: "Where do you find fault with [Jackson's] assertion that Entergy had no choice in the kind of generating capacity that they put on line?"
Mehra: "Mr. Jackson said in fact they had a choice between coal and nuclear. They could have taken coal, yes, even together with the Clean Air Act requirements, the costs would still have been substantially below."
Johnston: "But having made the choice, before [Three Mile Island], would you argue with the 'projective' cost, which is the information on which they had to make the decision?"
Mehra: "Senator, we all have to make decisions on information that we have. And we as managers have to live with the decision we make."
Johnston: "Mr. Jackson, did you have the ability to go all coal-fired at that time?"
Jackson: "I think the Clean Air Act would have been a serious limitation. Not only that, I'd like to point out that at that time, we were also looking at projections in terms of 70, 80 dollars for barrels of oil. ... Our industrial customers were coming to us at that point in time, saying 'find us the lowest-cost generation in respect to