Frontlines

Fortnightly Magazine - September 15 1996
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On January 1, 1998, California will "deregulate" the state's electric utilities. The Western Power Exchange (WEPEX) and the independent system operator (ISO) will start up, creating an open market for wholesale power.

Elizabeth A. Moler, chair of the Federal Energy Regulatory Commission (FERC), says she'll be there: "We'll all be celebrating the deregulation of electricity in California, on January 1, 1998, at the Rose Bowl."

Take It or Leave It

"If it comes down to a take-it-or-leave-it decision, then my advice is to take it."

William W. Hogan, research director for the Harvard Electricity Policy Group, touts WEPEX and the ISO as the quickest route to deregulation. He led a parade of notables who trundled down to Washington, DC, on a hot day in August to testify at the FERC's technical conference on governance, market power, and transmission pricing for WEPEX.

Others flew in from the big three investor-owned electric utilities (IOUs) (Pacific Gas and Electric Co., Southern California Edison Co., and San Diego Gas and Electric Co.), municipal utilities, advocacy groups, and even a gas distributor, Southern California Gas Co. (SoCalGas). Their attendance marks the end of the love fest at the California Public Utilities Commission (CPUC).

Hogan remains uncompromising: "The combination of bid-based economic dispatch, locational marginal-cost pricing, transmission-access charges, and transmission congestion contracts provides a system that meets the FERC's test."

Not everyone agrees.

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