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Fortnightly Magazine - October 1 1996

Chairman Miller's prediction that consumers and not producers will set future electricity prices is correct, assuming a competitive market. His observation (em that "states that move decisively to a competitive environment and that clear their decks of the debris of electricity companies' stranded costs as quickly as possible will be the winners" (em is equally correct. But estimates of stranded investments range from $20 to $500 billion. Who will pay to clear those "decks"? How will they pay without impeding competition, and without devastating financial impacts on utilities? These are difficult questions. It is easy to make assumptions but difficult to gather facts. Short-term decisions will affect customers, particularly those that lack competitive options.

A federal deregulation policy may be needed someday, but that day is far off. State commissions should have time to study alternative market structures and their impacts on citizens and utilities before deciding what is in the public interest. Businessmen do not base their important decisions on unsupported "data" or assumptions; state commissions should not base decisions with potentially devastating impacts on "notions" about market structures or assumptions about competition. Hear the evidence; measure the impacts; develop real-world policies. I don't want to see Virginia citizens become the short-term casualties of a regulator's long-term notion (and I don't expect that to be the case).

Edward L. Flippen, Esq., Mays & Valentine, Richmond, VA


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