As electric restructuring rockets to the top of state public utility commission agendas, regulators find themselves pushed in every direction. Pushing the hardest, in most cases, are legislators,...
Consumers: Cost or Benefit?
s Cherry Picking
"If we ignore history, we're doomed to repeat it. And what happened in the natural gas industry is precisely what will happen. The FERC authorized deregulation of the natural gas industry and, as a consequence, today's retail consumers (em meaning residential retail consumers (em are paying more than twice as much for natural gas as the large industrial users.
"I'm looking at Pennsylvania, for example, and the gas companies are selling gas to the industrial users, based on 1994 figures, at $4.03 per thousand Mcf, versus residential at $8.22.
"It will happen [in electric] unless the regulatory commissions do something about it. They could solve that problem by allowing retail wheeling only for residentials, and when they get it on line where it's effective, do it with industrial and large commercial users."
s Customer Transition Charges
"We think all stakeholders should pay. If you're going to have stranded costs, we think they should be shared by the stockholders as well as all the users (em those that exit the system as well as those that stay on. . . . It's hard to draw the line, so we're saying at AARP that all stakeholders should share those costs."
s Retail Wheeling
"Yes, they need it to get lower costs. . . . Retail wheeling conceivably can produce true competition, if you follow it carefully.
"[Customers] don't understand this concept at all, anymore than they understand gas. Let me tell you this right now. If the general public in the United States understood what has happened with the FERC deregulating natural gas and allowing large users to pay half as much as residential consumers, there'd be a revolt. And not even the members of Congress know that. The same is going to be true with electricity.
"I think they're out of touch, frankly, at the FERC."
s The Environment
"We have to go on the assumption that whatever method is used is going to be more environmentally friendly, and we support that philosophy.
"Natural gas is being used more and more in creating electricity. And that is not coal and that is not nuclear, that is a clean fuel. So the state of the art is such that you can have a friendly environment with regard to electricity. . . . That has to be a caveat." t
John McManus is chairman of the Consumer and Housing Committee of the AARP's National Legislative Council. AARP represents 33 million people over the age of 50. Among his elected or business posts, Mr. McManus was a borough councilman for 20 years. He has owned McManus Heating and Refrigeration Co. in Pittsburgh since 1950.
s Cherry Picking
"I do not think that will result in the retail or smaller customers paying for that advantage. On the gas side, since there's some history there, you can see that clearly the industrials have saved the most,
as much as 40 percent, in that
class of customers. But at the retail level, there have been savings of 25 percent. So it is universally across the board.