[BETA] Fortnightly

Prometheus paid dearly when he stole fire from the gods and gave it to man, but his courage paid off. Fire now belongs to the people. So should electricity, says New York state Judge Joseph Harris, of Albany, who ruled last fall that state regulators could force open New York's electric industry, but warned against hidden favoritism:

"Prometheus," wrote Harris, "in breaking the monopoly of the gods and by giving electrical energy to mankind ... [should] not be demeaned by a mere transfer of that monopoly to the lords of industry. It was a gift to mankind, not a gift to a favored few." (See, Docket No. 5830-96, Nov. 25, 1996, Supreme Ct., Albany County, affirming N.Y. PSC Opinion No. 96-12.)

Turn now to Alabama, to a suit filed January 27 to challenge a state law enacted last spring. The plaintiffs say the law is unconstitutional (em that it will block meaningful electric competition.

Where is the metaphor, you ask? Alas, it is not Prometheus, but Vulcan, the Roman god of the forge, whose statue stands high above Birmingham on Red Mountain (em the second-tallest in the country and the tallest cast-iron statue in the world. Even so, this story claims enough characters to rival the classical myths.

The Story

"This is the worst, most anti-choice legislation that's out there."

That is William S. Armistead, v.p. for federal affairs at Citizens for a Sound Economy, one of the plaintiffs in the suit. He's describing Alabama Code sec. 37-4-30 (see sidebar), which requires customers wanting to sign private power supply contracts in Alabama to notify their utility beforehand. If the utility sees a problem with stranded costs, the law could require approval from the state public service commission, and perhaps even a bond to guarantee cost recovery for the bypassed utility (em meaning Alabama Power Co.

By all accounts, passage was virtually assured before the bill was even introduced (em though some unions opposed it (em due to behind-the-scenes lobbying. Nearly everybody I talked with remarked about that: "The most massive ever assembled in Alabama," said Tom Conway, counsel for MacMillan Bloedel, a paper manufacturing company. "On greased wheels," said Marty Ellis, communications coordinator for the Alabama Electric Consumers Coalition, of which Bloedel is a member. "It took everyone by surprise. Some of Alabama Power's largest customers had no idea it was in the works."

Those who oppose the law see it as a "catch-22." A customer seeking a private power supplier will want to know all his costs up front. However, before any deal is completed, the law would force a customer to notify the utility, which would then estimate its stranded costs and, if significant, send a bill back to the customer, which might then make the deal impractical.

One of those opponents, Greg Elam, is the power marketer who brought the suit. He knows the electric industry, having been hired in 1993 by Enron to help set up their trading operation in Houston, after 12 prior years with Cincinnati Gas & Electric Co. Today he works at American Energy Solutions