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

Fortnightly Magazine - November 15 1998

knew it was going to cost more than planned, but perhaps "didn't sound the horn loud enough."

Michael W. Holmes

N.H. Consumer Advocate

Deregulating Over Again.

"If it could be done, to have somebody who was more of an overall coordinator.

"[Also] I think you better understand, up front, that it's going to take resources and you better have those resources ready, set aside. Because if you have to go through the legislative process to get that after the fight starts, you're already way behind.

"I would say that for our office to have gone through this we would have basically needed double the budget that we have. Our budget's about $400,000 a year."

Learning From Mistakes.

"I believe what the utilities will do to the extent that they can is they're going to try to get it to federal court and try and litigate these issues in federal court for no other reason than to delay. Every day of delay is a day of victory if you have high rates and you don't want to absorb any of your stranded costs."

ISO vs. Transco.

"We have not contemplated a fully regulated transmission system ¼ that's an interesting concept. I haven't thought about it.

Interventionist or Free Market?

"The approach we've taken is the interventionist approach. I believe in free markets, but I think you first of all have to establish that you have a free market. I don't think there's any such thing as simply pulling the plug and assuming a free market is going to happen. Free markets are free markets because the government has set up over the years vigorous anti-trust policies and has enforced them. To take something that's been a strictly regulated monopoly and to simply draw a line and date and say after this date, this is going to be a free market, I think is really naive."

Learning From Others.

"Massachusetts and Rhode Island ¼ we learned that they were too generous. That they, in my opinion, did not make as a good a deal as they could with the utilities and we could see, sit here and watch, that there wasn't any market developing. They hit their [customer choice] days and nothing happened."

Plants For Sale.

"Yes, they sold these plants [in New England] and they got a nice market-to- book ratio of 1.5, but they ended up taking a big chunk of that. Now you have to ask yourself: if you're a sensible ratepayer, why is it such a good deal for you?

"If that was the value of them, weren't you going to be just as well off as holding on to them? Value is value. And you look behind it and you realize one of the things that was going on is several of the large plants were going to be depreciated in 2007, so there would have been no capital carrying costs or depreciation. To just say we've got a market-to-book ratio of 1.5 and we'll give customers a good piece of it and we'll walk away with a good