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Kilowatts by Choice, Ready or Not

Fortnightly Magazine - November 1 1997

Plans call for alternate power sources to be plugged into their new customers on Nov. 1, giving power suppliers about eight weeks for educating consumers of their options.

Rhode Island. On July 1, Rhode Island allowed large customers choice as a prelude to full competition, slated for January 1998. (It is not a pilot, callers are hastily informed.) Nineteen non-regulated power producers are registered to serve about 30 industrial customers, yet most have no load. A few companies haven't decided whether they plan to stick around for full choice, blaming the state's poor economy. %n11%n Part of the blame was also placed with the utilities commission. Bob Kwartin, director of retail power marketing for Eastern Power Distribution, says: "The way the commission has written the rules makes it difficult for the customers to find savings. In Pennsylvania and New York, the PUCs have worked to make sure that not all the benefits flow to the utility (em at least for the pilots."

The most enthusiastic marketer is New Energy Ventures, which captured 11 of the 18 customers that switched. Other successful players include Evantage (an unregulated subsidiary of Virginia Electric and Power Co.) which picked up two accounts, Enron and Providence Southern.

Pilot Plans Under Way, But No Mandate

In this group, experiments are going on in earnest and energy suppliers are active in the state. Some of these experiments may expand soon to include greater numbers of customers or more utilities. There may even be some sort of legislation. However, there's been no commitment by the state to the idea of customer choice.

Idaho. The utilities commission in April approved pilot programs filed by Washington Water Power Co. and Idaho Power. %n12%n The two-year pilot at Washington Water Power for residential and commercial customers was deferred due to lack of supplier interest. Its one-year-old industrial pilot is going well, says a spokesperson. Idaho Power's pilot allows users of 5 to 10 MW to choose fixed or market prices.

Illinois. On Aug. 15, the state commerce commission sent an analysis of S.B. 55 to Senate President James "Pate" Philip, which found that the bill "leans too heavily in favor of the utilities [and] does not provide the structural framework where alternative competitors can emerge." %n13%n The bill reportedly would take away some ICC authority over special contracts, depreciation rates and rates charged by a utility to its tariffed services customers during the transition period. It also would repeal the need to complete statewide and utility-specific least-cost energy plans.

The commission report criticizes the securitization plan designed in S.B. 55 as providing no guarantees that proceeds will buy down uneconomic assets. It also attacks the transition charge, which is based on a setoff for a so-called "mitigation factor," and which the commission believes would give an inherent advantage to traditional utilities that continue to provide bundled service to retail customers.

Illinois Power and Central Illinois Lighting Co. have had pilot programs in place for more than a year.

Iowa. The first pilot program in Iowa was filed with the utilities board and the