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

Fortnightly Magazine - November 15 1998

were able to fashion a process that got right down to what the various interests really needed and in that way, they developed something that gave [utilities] the opportunity to recover their stranded costs all at the same time, creating a market that actually can clear a market price for generation.

"Our process was more litigative than legislative. From that I learned maybe their model had some benefits."

From New Hampshire, "we learned the importance of providing principles ¼ what would be allowed and what wouldn't be allowed. And the best example contrasting with New Hampshire was in 1995 we committed to full opportunity for recovery of non-mitigatable stranded costs. And once that principle was set in place, it really created a framework for all the negotiation and all the discussions and legislative debates around what needed to be done."

Plants For Sale.

"I think it's been a very position development. We've had some successful divestitures, successful to the point that no one had dreamed of at the start."

Who's Best?

"I think Pennsylvania [is] because they were able to develop a process that got everyone in a room and got everyone to lay out what their most basic interests were. And then with the involvement of the commission, they were able to craft an agreement that pretty much respected all those most basic interests ¼ without giving away too much to each party."

Janet Gail Besser

Chairwoman, Mass. DTE

Deregulating Over Again.

"There were issues where we needed to balance between easing a transition for consumers and insuring the competitive market could flourish.

"Let me talk about some specifics. One is the standard offer ¼ our original vision, there was no standard offer then. It was basically, we're going to make this change, everyone will be out there, everyone will be choosing."

"It's a seven-year price pass that guarantees customers a 10 percent savings even if they do nothing. The Department's original proposal didn't have anything like that.

"What I would have done differently ¼ is include in that a mechanism for us to revisit it sooner than the seven years. We are, in fact, looking at doing that."

Learning From Mistakes.

"There were dramatic changes in the New England electricity market with the electricity outages that changed that market price. When 2.8 [cents per kilowatt hour] first showed up, people were talking market prices around 3. Then the nukes go out. The nukes are staying out longer than anyone anticipated and into that market you suddenly have this 2.8-cent standard offer dropped in. It had some distorting effects.

"As soon as the divestitures took place, that price went up. Millstone 3 came back on line this summer, which was great. And the market is changing, we have a lot of power plants in the pipeline. As they come on line, the market will change. But that lack of flexibility that was built in ¼ I think that's something I would do differently."

ISO vs. Transco.

"I was a big proponent of the ISO model. I don't see it as versus