FOILING EXPECTATIONS OF BOTH SUPPORTERS AND detractors, the Clinton Administration's proposed electric restructuring legislation offered no new policy on carbon-dioxide emissions, such as a cap-...
More low-cost states seen joining the move toward electric restructuring.
Six months ago, those states with the highest electric prices appeared the furthest along on the path to electric industry restructuring. That is no longer the case.
Today, even those states that can boast of lower-than-average rates are exploring avenues toward more competition, as shown below. The table groups states into five tiers, by the level of activity to date. These activities include initiatives by legislatures, regulatory commissions, utilities and other parties. "Fact finding" indicates workshops or studies are under way, or that legislation is pending. "Investigation" refers to action under way that appears likely to lead directly to adoption of a concrete restructuring plan.
No one can deny that the states capturing the biggest headlines (e.g., New Hampshire, Maine, Rhode Island, California) also carry some of the highest electricity prices. But Montana, a state that recently enacted legislation, actually sports lower-than-average rates. Oklahoma, another state apparently on the verge of formalizing a plan, claims low rates as well. States like Nevada, where rates run roughly in line with the national average, also are restructuring. Part of the motivation there is to avoid the possibility that neighboring states, such as California, will capture an early advantage.
Several other states deserve mention for bucking the trend. Two high-price states that have been actively involved in the restructuring debate, New York and Connecticut, have not yet agreed on the appropriate restructuring path to pursue, stymying formal regulation or legislation.
Eventually, most states likely will move into tiers four and five. When that happens it will be time to ask a new question: When will all this activity produce the promised price reductions? t
Sally Hunt and Kristina Sepetys are analysts with National Economic Research Associates Inc.
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