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The 1998 Utility Regulators Forum Four States, Eight Views: Looking Back on Deregulation

Fortnightly Magazine - November 15 1998


Commissioner, Calif. PUC

?Deregulating Over Again.

"We're very satisfied with what we did. We had the most difficulty with ¼ getting agreement with the legislature and working with the legislature. So one lesson learned is you need to get the legislature involved early on.

"If we would have known the electric utility companies were going to divest 100 percent of their generation, we probably would have done it a little different than the [power exchange]. The PX wouldn't have been as important. Because market power is our number one issue. If we'd known how fast they could have really done a Transco, I personally would have pushed for it."

? Learning From Mistakes.

"I'm sure people would have done other things. But structurally - the ISO, the PX, the opening of the metering and billing, consumer education ¼ it [was] good.

"Consumer education, we were criticized for, for spending the amount of money we had. The criteria for consumer education was how many customers did you want to be aware of what we were doing? And once you make that decision, the second decision is, 'What does that cost?' Well, we first made a decision that we wanted 60 percent ¼ then we went to 25 so-called experts on a panel and they said if you want 60 percent, it's going to cost $89 million. And we said well ¼ should we change our 60 percent? And we said no, let's spend the money. I don't view that as a mistake."

? ISO vs. Transco.

"It's a pragmatic answer. Tell me how fast you're going to do one versus the other. Because it shouldn't be the driver, as to setting the timetable. And that's what we looked at. [Transmission is] only five percent of the bill. So you're not going to hold up the whole deregulation for 5 percent ¼ an ISO was a convenient compromise."

Interventionist or Free Market?

"We did the right thing. We let the legislature decide what to do to make sure we didn't throw out the baby with the bath water on the renewables. And they decided to put up so much money and make sure half of it went to maintaining existing renewables and half of it went to encouraging new renewables - $540 million. And then funds for research. And we respected the legislature to make that decision.

"As far as consumer education, they, in [A.B. 1890] instructed us to have consumer education, they just never realized how much it would cost to do it right."

Learning From Others.

"I think Pennsylvania did an interesting thing. They created an incentive for the customers to switch ¼ in essence, they used the utility stockholders as whipping boy to provide incentive, by not charging CTCs to the people who switch ¼ I'm pretty sure you get a 15 to 20 percent discount if you switch.

"But it all came out of the stockholder. I don't think that's a balanced view. We're supposed to be here to balance the interests of the two."

Plants For Sale.