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News Digest

Fortnightly Magazine - July 1 1998

Out of Control?

Commission Abandons Case, but Says It Was Only "Clearing Dockets."

FINDING THE PACE of change "faster and broader" than it could have imagined, with events driven by "legislative and economic forces beyond [our] control," the Washington Utilities and Transportation Commission decided on April 22 to terminate its generic investigation of electric industry restructuring in Docket No. UE-940932, leaving only a statement of policy it had issued late in 1995.

Does that mean the UTC will just stand back, make way for competition and let 'er rip?

Well, not exactly, explained UTC chair Anne Levinson. When asked whether the UTC would abandon electric regulation entirely, Levinson answered, "I'm afraid you may have less of a story here than you might think.

"It was more of a process improvement than a substantive shift," she explained. "We launched that investigation about four years ago, but the shelf life for this docket turned out to be very short, as the nature of the questions changed.

"The questions that you raise - codes of conduct, reliability, consumer safeguards - virtually none of those items were in the debate when we launched our inquiry. Also, at the end of the last session, our legislature ordered us to examine several components and trends in the electricity system, including aggregation of customer loads, service quality, reliability and investments in public purpose programs. Those studies are due by Dec. 31.

"When I came in six months ago and saw the number of cases going on, I wanted to simplify. Our staff was running in all different directions. Now, however, we felt the need to reprioritize, to address the critical areas of the debate. The forum has changed, in a way."

In fact, a study group convened in 1996 by governors of northwest states had recommended the area move toward electric service competition at the retail level. Recently state lawmakers enacted three electric restructuring bills, requiring utilities to: (1) submit unbundled cost studies and reports on service quality and reliability to the UTC and the state auditor and directing both to report to the legislature; (2) adopt specific basic consumer information and protection policies; and (3) make available "bi-directional" metering equipment for customers who install site-specific renewable generation equipment. Also, the UTC had issued rulings in utility-specific cases involving special rate contracts, market-based pricing tariffs, retail open access pilots, and a merger.

By abandoning its restructuring docket, how would the UTC deal with subjects such as hydroelectric policy, salmon conservation and market power at Bonneville Power Administration?

"BPA, hydro and salmon - these issues are enormously important for the region," Levinson admitted. "BPA controls 80 percent of the transmission and produces more than half the power. We have more public power than any state except for Nebraska, but our commission cannot regulate it. This combination of actors make the debate different for us than other states.

"We have the second-lowest cost of power in the country," she added. "So a significant issue in our debate is whether in fact retail competition will bring any savings for residential customers.