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Kilowatts by Choice, Ready or Not

Fortnightly Magazine - November 1 1997

compete "on a level playing field" to be allowed to supply power to state customers. The state's attorney general, a business coalition and a consumers organization filed suit against the PSC, Detroit Edison and Consumers Energy in August, charging that the commission's expedited schedule gave an unfair advantage to utilities. The parties failed to get an injunction, however, so hearings are continuing. Also in its June order, the PSC endorsed recovery of stranded costs for all "prudent" items, but deferred any decision on stranded costs pending the new state legislation to implement a securitization plan and resolve uncertainty regarding tax treatment, which was expected to be introduced this fall.

In April, Consumers Energy held a lottery to select the 17 participants for its pilot program (customers who use 3 megawatts or more, for a total of 100 MW of CE's load program) which the PSC approved in November 1996. But, according to CE's executive director of rate and regulatory matters, Lisa Thibdaue, some customers face a big learning curve. The process is going slower than anticipated, she admits; no one has yet taken power from an alternate provider. Consumers' full choice plan comes before the PSC on Oct. 14. Thibdaue says some politicians think that once the green light is given, customer choice will happen "overnight"; customers, she says, have more appreciation for the time it takes.

Montana. Montana's new restructuring and customer choice law %n6%n sets two deadlines for mandatory retail choice.

First, retail choice must be available by July 1, 1998, to all customers of investor-owned electric utilities with loads greater than 1,000 kilowatts, or with loads greater than 300 kWa per meter that aggregate to 1000 kWa or more. Second, all remaining customers of electric IOUs must have retail choice as soon as feasible, but before July 1, 2002. %n7%n

Meanwhile, the act also dictates that beginning July 1, 1998 all utilities must run pilot programs to offer choice to residential and small-commercial customers. Cooperatives may opt in or out. Interest by out-of-state providers was rather limited as of September.

The law also requires IOUs to file transition plans at least one year before any customer is entitled to exercise retail choice. On Aug. 14, the Montana PSC ruled that Montana Power's transition plan for pilot programs was incomplete regarding consumer education and stranded costs, and asked the company to file a revised plan. %n8%n PacifiCorp filed its transition plan on July 10, but the PSC had yet to rule by press time. %n9%n

Pennsylvania. Gov. Tom Ridge signed Pennsylvania's Electricity Generation Customer Choice and Competition Act late last year, requiring all of the state's electric public utilities to file a restructuring petition with the PUC between April 1 and Sept. 30 of this year. Starting on Jan. 1, 1999, one-third of each customer class must be allowed to choose an alternate generation supplier. A second third may choose by Jan. 1, 2000, with choice mandated for all customers by Jan. 1, 2001.

In late August, the PUC approved pilot programs for retail access for the state's IOUs. %n10%n