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Legislative Hot Spots: From Texas to Ohio, New Jersey to Minnesota, Electric Restructuring Games Begin

Fortnightly Magazine - February 15 1997

adds that he suspects there would be wires charges for conservation and environmental measures, and for providing power to low-income customers.

Energy battles in Maine usually pit utility lobbyists and paper companies against consumer groups. But this time around, big paper and consumers are working closely because of similar interests. The two groups met throughout the commissionÆs draft process.

The commission attorney notes that politicians, meanwhile, need to stick to brushing broad strokes. ôThere could be a fight on any aspect of this if the Legislature decides it wants to write in the details,ö he says.

Minnesota:

StateÆs Cost Advantage Leaves Legislators Wary of Change

Two committee chairs in the state Legislature have predicted there will be no 1997 electric restructuring laws in Minnesota, but several new bills were expected, and politicians could act despite the forecasts.

Lobbies or legislators intent on getting bills passed could prompt action.

Sen. Dan Stevens (R), for instance, was considering introducing a model proposed by the American Legislative Exchange Council, according to Ross Bell of ALEC. The senator, on the Environmental and Natural Resources Committee, helped the national group draft the bill at a December meeting.

The state Department of Public Service also submitted a proposal late last year to the governorÆs office. A bill could follow, at the administrationÆs prerogative.

Sources say the governorÆs legislation would include a five-year phase-in of competition, starting with industrial users. An exit fee would be used to pay a percentage of stranded costs.

Betsy Engelking, principal analyst at the Public Utilities Commission, says that from what Sen. Steven G. Novak (D) indicates, a bill will come from his panel only if stakeholders reach agreement. Novak chairs the Jobs, Energy and Community Development Committee.

In the House, Rep. Loren G. Jennings (D), chair of the Regulated Industries Committee, is equally shored up against change. ôI donÆt think we need to go very fast in Minnesota,ö he says. ôWe have very reliable and low-cost energy here in the upper mid-West.ö

Other bill authors include Northern States Power Co., Minnesota Power & Light Co., and environmentalists.

NSP falls on the side of the Minnesota Energy Consumers, Minnesota Chamber of Commerce, and the PUC, which are all pushing competition, although the PUC and NSP donÆt see eye-to-eye on stranded costs. Interestingly, stakeholders havenÆt debated stranded costs much, since generation is viewed to be competitive.

On the other side of the deregulation fight is the Restructuring Alliances, which include cooperatives, municipal utilities, environmentalists, utility labor and senior citizens, all advocating ôgo slow.ö

ôWholesale first,ö they say. The PUC published a wholesale report Oct. 18, recommending that wholesale competition barriers be removed.

But, on the retail side, during hearings that ended Dec. 12, the PUC learned that rural and small communities were concerned about higher rates. Local chambers of commerce are split with the state chamber. Co-ops, too, are mildly divided. The United Power Association is for retail competitionùat its management level if not at the board level.

Before retail competition comes, Minnesota, like other states, will need to resolve the tax ramifications of restructuring.