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Deregulating Retail Energy Services: First and Subsequent Steps

Fortnightly Magazine - May 1 1996

level playing field

in the retail energy services market as nonutility RESCOs do.

Consumer Groups. Retail consumer choice will greatly strengthen the ability of consumer advocates to obtain the protection and benefits they want for customers. Retail access will elevate any consumer advocate with a significant client base from the role of a supplicant in regulatory proceedings to that of a dictator of terms in contract negotiations. Visualize for a moment the power that consumer advocacy organizations like the American Association for the Advancement of Retired People (AARP) will wield when they issue a request for proposals (RFP) to provide energy services to their gargantuan membership bases. This buying clout will give organizations like AARP the power to obtain whatever consumer protection they want by contract.

First of all, they will get startlingly good bids for providing the range of retail energy services, including electricity, gas, energy-efficiency improvements, and communications services. Second, they will be able to specify whatever customer protection they choose in the RFP. Third, the prices will be so good that such organizations will be able to fund special low-income services and protection for their members through a small markup on the resale of energy services.

My question to environmental organizations and consumer advocacy groups is: How long will they fight to delay customer choice over retail energy services, even though a delay postpones the benefits that their clients want? t

Michael Arny is president of Arcadia Resources Inc. and director of the Consortium for Integrated Resource Planning, Engineering Professional Development Department, University of Wisconsin. Arcadia Resources Inc. has established the RESCO Restructuring Coalition to support the RESCO Plan.






















RESCO Proponents


. Johnson Controls, Inc. filed RESCO Plan in California, Wisconsin, Illinois, and Ohio.

. Alliance for Clean Energy Systems (ACES) supported plan in Wisconsin.

. Wheeled Electric Power. Helped introduce Plan in New York.

. Arcadia Resources, Inc., manager of RESCO Restructuring Coalition, helped refine Plan in Wisconsin. Filed comments on FERC open-access NOPR suggesting federal actions to support the RESCO Plan.


RESCO Origins


The RESCO Plan for utility industry restructuring was first developed in 1994 in a report titled, An Integrated Approach to Restructuring the Energy Services Industry, Retail Energy Services Industry Competition Can Deliver the Goods: Energy Efficiency, Environmental Protection, Consumer Protection, and Lower Costs, published by the Consortium for Integrated Resource Planning of the Engineering Professional Development Department at the University of Wisconsin.

This initial report was written by the current author with valuable input from a number of individuals representing consumer, environmental, regulatory, and business perspectives, including Sonny Popowsky of the Pennsylvania Office of Consumer Advocate. David Lapp of Environmental Action, Commissioner Scott Neitzel of the Wisconsin Public Service Commission, Richard Cudahy of the National Association of Energy Services Companies, and David Matasek of Johnson Controls Inc.


Signing Up for Choice


The RESCO Restructuring Plan gives customers a broad spectrum of options for acquiring energy services.

Pick a