[BETA] Fortnightly

Rep. Dan Schaefer (R-CO), closed his final hearing on electric industry restructuring with what sounded like a promise to push utilities down the bumpy path of retail wheeling.

"My vision for the future is one where all consumers have the ability to pick and choose among numerous competitive suppliers of electricity," Schaefer said. "It is one where all consumers have the benefit of lower rates, better services, and new innovations brought on by competition . . . where the power over electricity rates and services is freed from government control."

Schaefer, chair of the Subcommittee on Energy and Power of the House Commerce Committee, was expected to have a bill ready by the end of spring (officially June 20). However, the last subcommittee hearing was May 15, and no bill was forthcoming as of press time.

At the hearing, Schaefer noted that each utility has the chance to shop for electric power since the Federal Energy Regulatory Commission opened the transmission grid. He urged Congress to give consumers the same benefits of the free market.

"Congress will have failed if our legislation allows only the largest consumers of electricity to benefit from increased competition," the congressman said, adding that access must come sooner, not later.

Eighteen witnesses addressed the House panel, including Kenneth L. Lay, Enron Corp. chairman; Stanley Packman of Eastern Suffolk (Long Island) Board of Cooperative Education Services, representing the Educational Electric Buying Group; Robert Gee of the Texas Public Utilities Commission, representing the National Association of Regulatory Utility Commissioners (NARUC); Christy Spoa of Ellwood City Save-A-Lot, representing the Food Marketing Institute (FMI); and Glenn English of the National Rural Electric Cooperative Association.

"There are many who have urged us to go slow or to wait," Schaefer said. "While we are waiting, consumers lose. Mr. Packman's testimony is a good example of this: His schools have been waiting over two years to competitively purchase electricity. This wait has cost the schools about $9 million per year."

If nothing is done, he warned, utilities will have no incentive to cut costs.

English was one witness who suggested that Congress "go slow." The effects of Order 888 have yet to be fully felt, he said, and some guarantees must be in place first. There's no universal definition of retail wheeling. Furthermore, households, farms, and small businesses have far less know-how or leverage to negotiate for better rates. "We fear they will be last in line to be able to benefit from retail wheeling."

Spoa, whose association represents more than 21,000 food stores, noted that although his constituency is one of the largest in the United States, it is "held captive to monopoly rates sanctioned by state and local governments." Among FMI's recommendations: that generation be unbundled and sold separately from transmission and distribution; that customers be allowed to aggregate loads; and that customers, regardless of consumption, enjoy open access to market rates that reflect the cost of unbundled systems. "Through aggregation and greater efficiency in generation and transmission, food retailers anticipate savings of 15 to 50 percent," Spoa stated.

Lay's testimony supported