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1996 Regulators' Forum

Fortnightly Magazine - November 15 1996

consumers] fit in in that they will get the benefit along with the large customers of the reduction in rates that we hope to accomplish through deregulation and opening the market. But they weren't crying for it because their bills generally were not that much out of line."

Question: What are the pluses and minuses of U.S. Rep. Dan Schaefer's restructuring bill?

Response: "I really haven't had a chance to analyze it. . . . As long as the states are left with the retail function and the intrastate regulation, some overall federal policy would not be objectionable."

Question: It appears from reading the California restructuring legislation that, like in Rhode Island, the utilities got everything they wanted. Would this have happened had the interested parties worked solely with the CPUC and not with legislators?

Response: "There were 100 people in that room for . . . 200 hours, and I was there for each hour myself, personally. So there were no deals done in the dark in the booth behind the back. They were done in public. I was there. Our voice was heard. In some cases, it was rejected, and [legislators] did something differently. In some cases we hadn't acted, so it was hard to say. It was intrusive maybe, but whether they decided differently than we would have decided, we'll never know.

"I think, though, that the pressures are great. If the 100 largest industrial customers in every state want to have some kind of restructuring, there's going to be tremendous pressure put on the commission. And I think if the commission doesn't respond in some form, there will be pressure put on the legislature and I'm sure the governor's office in every state. . . . Those are the realities. I don't think it's the utilities, it's the large industrial customers driving this. . . . The utilities are probably just trying to get protection on the stranded assets as best they can. "The legislature adopted our position on the stranded assets, which is to give [utilities] 100 percent of those assets that are above market, but reduce their return by 20 percent. The legislature did not touch that decision. [The legislature and the governor] have the authority in most states to enact legislation that can override virtually any decision. So if you don't make them a player, they may get vindictive." [End of Conlon comments]

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Comments by Susan F. Clark, chairman, Florida Public Service Commission

Q. NARUC is restructuring. What must it maintain, what must it change, and what qualities must its director have to keep it ahead of industry issues?

A. "I think the focus should lie in providing commissioners with assistance . . . and speaking as a cohesive voice on national and international issues that affect utility service. We have to become more nimble in our ability to respond to the ever-changing regulation of utilities. And I think we're doing that. We can't wait for our meetings that we hold three times a year. [NARUC's new director] will have to have some experience

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