[BETA] Fortnightly

Perhaps the only political prediction bound to come true this year is that the words ôelectric restructuringö will reverberate in nearly every stateÆs legislative chamber.

So says Matthew Brown, director of the energy project at the National Conference of State Legislatures.

But other factors support BrownÆs prediction. Public Utilities FortnightlyÆs informal survey of most states turned up similar results. Legislators know that the Clinton Administration and the U.S. Congress plan to introduce a federal bill this year. If stateside players donÆt jump in now, they may be pushed in later, the thinking goes.

There are at least eight states to bet on for new restructuring lawsùwith the usual political caveat that anything that can change will. Five states are in the Northeast; three are in the Central U.S.

Of course, other states have a long, quirky chance of deregulating. Pennsylvania, after all, took many by surprise when it enacted comprehensive electric restructuring legislation last Dec. 3 (becoming the fourth state to do so).

But take Nevada. If state Sen. Randolph J. Townsend (R) gets his way, he will restructure the Public Service Commission along with the utility industry. ôTheyÆll both be different when we get done,ö predicts Townsend.

The eight states chosen by Fortnightly were selected for the relative maturity of their commission efforts, special legislative committees and the reports issued by them. The reason being: States that have come this far are likely to be 1997 hot spots.

Besides the usual issues of stranded costs, wholesale-versus-retail competition, and divestiture, what subjects kept repeating in the states surveyed?

Taxes. Consumer concerns. Rural cooperatives.

Co-ops could prove to be the largest roadblocks to restructuring in rural states or be the final support needed to push deregulation into law.

Some believe, for example, that only with the blessing of the 13 co-op Pennsylvania Rural Electric Association would Pennsylvania have passed its legislation.

Taxes have been called ôthe sleeper issueö in some states, but itÆs waking up the lawmakers. Taxes are key for more than half the states surveyed. In summary, legislators are considering eliminating gross-receipts, property or other taxes to lower energy costs and keep utilities competitive. But revenues must be recaptured somehow. There are no quick solutions.

Brown says legislators will introduce more pro-consumer billsùboth in the timing of ôchoiceö rollouts and in the law itselfùbecause they realize, perhaps from bad examples set by other states, that restructuring must benefit all.

Texas likely will be awarded the ôhot spot of the year,ö because its combination of utility, big-business, consumer and political interests should inflame a fight worthy of the recent telecommunications bout.

All three of the largest utilities in Texas walked out of an American Legislative Exchange Council meeting where a model restructuring bill was drafted, says Ross Bell of ALEC.

Says Bell of the upcoming Texas showdown: ôItÆs going to be a battle.ö

Then again, no one said restructuring would be easy.

Joseph F. Schuler, Jr. is associate editor of Public Utilities Fortnightly. E-mail: schuler@pur.com

Connecticut:

Consumers To Pay Partial IPP and Utility Layoff Costs?

Wholesale or retail?

That could be debated