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Electric Industry Splits Over National Choice Bill

Fortnightly Magazine - September 1 1996

of Electrical Workers (IBEW), predicts a long fight. "We believe that, despite the good intentions of some of its backers, the bill as it stands would cause chaos and disruption in an industry already undergoing massive changes." Barry urged Schaefer to complete deregulation of the wholesale electric market first. He also asked for a guarantee that access to and reliability of electric supply would not suffer for the benefit of new entrants.

Barry took particular issue with the projected consumer savings reported by Citizens for a Sound Economy, which he labeled as faulty assumptions resulting in factually incorrect conclusions. "CSE presented only the alleged positive aspects of accelerated deregulation and restructuring, avoiding any quantification of the downside to such actions," he claimed.


Peggy Welsh, executive director of the Electric Generation Association (EGA), applauded the Schaefer bill for putting a date to the introduction of competition in the electric industry. She noted that the bill comports with EGA's Vision of a Fully Competitive Electric Industry, which urges Congress to implement competition by a date certain and to clarify federal and state jurisdiction. She said EGA agrees with the idea of uniform national standards to guide competition, and complimented the bill for acknowledging the interstate nature of today's electric market while respecting state needs for flexibility when implementing broad federal guidelines.

Ohio state Rep. Dale N. Van Vyven, 1996 national chairman of the American Legislative Exchange Council (ALEC), which represents 3,000 state legislators, applauded Schaefer (em a former state legislator and ALEC alumnus (em for assigning states major responsibility to implement the transition. "We will measure Congressman Schaefer's proposal, and the others that may follow, against the fundamental principles ALEC stands for (em opening free markets, limiting government, promoting federalism, and protecting individual rights." Van Vyven noted that on June 1 ALEC became the first organization of elected officials to adopt model state legislation on a competitive electricity market, and that the organization is now working on a regulatory framework to promote consumer choice.

Natural Gas Supply Association (NGSA) president Nicholas Bush called the bill a "major step" toward ensuring an "orderly rather than chaotic" restructuring. Pointing to the successful restructuring of the natural gas industry, Bush said that efforts to bring competition to the electric industry "will, if carefully drafted, have long-range, positive consequences for the nation."

The bill also received a vote of confidence from the Partnership for Customer Choice (PCC), a coalition of seven geographically diverse utilities (em Allegheny Power, Cinergy, PacifiCorp, Pennsylvania Power & Light, UtiliCorp United, Wisconsin Energy Corp., and Wisconsin Power & Light. The coalition said it was "unfortunate that certain opponents of customer choice are masquerading behind the banner of states' rights while at the same time opposing efforts of state legislators and regulators to institute customer choice programs." Noting that many electric utilities will argue against federal legislation, PCC said the bill fills a critical need by addressing issues such as barriers to entry, jurisdiction/reciprocity, and the proper role of states. t


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