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Consumers: Cost or Benefit?

Fortnightly Magazine - June 1 1996

[electric] competition."

s Customer Transition Charges

"If there are going to be CTCs, it seems to me everybody's paying the embedded costs, the existing rates. They're already paying what becomes the stranded asset in a competitive regime. So if you impose that charge on a nondeparting customer, that's like imposing the charge twice.

"Now, as to whether there ought to be CTCs . . . that's a whole different subject. There are some clearly some stranded benefits issues that have to be addressed first . . . but the idea that a utility is entitled to 100-percent recovery of its stranded assets is . . . basically saying, 'You should have been a slob, you should have been a sloth, you should have been wasteful, we're going to reward you for it. If you've been efficient, you're going to pay a penalty.'"

s Retail Wheeling

"I don't sense any great outcry on their part for it. . . . Basically, they're indifferent to it."

s The Environment

"It isn't entirely clear to me as to what the results are going to be. I've heard arguments that this will benefit nuclear power, and variants that it will hurt it. I've heard similar arguments vis á vis coal. . . . If environmental decisions are important to the consumer, I'm sure among the opinions they'll be offered is green pricing, like 'dolphin safe' tuna.

"I know there are people on the East Coast who are convinced . . . it's going to increase the burning of coal and therefore all the coal pollutants are going to increase, and those things are going to blow East. But I also know that the coal people have fears that it will provide more incentives to build hydro facilities in Québec or mean imported power from other areas." t

Ashley C. Brown is executive director of Harvard University's Electricity Policy Group in Cambridge, MA, which develops alternative strategies for the transition to a more competitive electric market. Mr. Brown also is a consultant to Hagler Bailly and has served on the Ohio Public Utilities Commission.

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