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

Fortnightly Magazine - November 15 1998

piece I think is very short sighted."

Who's Best?

"I don't know that any state has had a successful deregulation process yet."

Rep. Jeb Bradley

Chairman, N.H. House energy committee

?Deregulating Over Again.

"I would want to have placed more emphasis on negotiations prior to a restructuring order. And would have like to have seen that process move forward rather than watch us end up in court.

"We have one of the more aggressive sections on stranded cost recovery which clearly, on the interim order, was a 60 percent recovery and it forced the litigation. So, having said that, there needs to be burden sharing on the issue of stranded costs when you have a utility that has rates that are significantly higher than a regional average."

? Learning From Mistakes.

"Not having intense negotiations prior to having a restructuring order. That was clearly a mistake ¼ The issue is stranded cost and I think negotiations would have been helpful for us."

ISO vs. Transco.

"I think we're going to have to wait and see how the ISO model works out. I think there's been, at least in New England, some unanimity about going with an ISO model but there's still some questions remaining as to when it's going to be operational in terms of a market-clearing price."

Interventionist or Free Market?

"From my perspective, having seen what the PURPA-related rate orders have done ¼ My sense of a renewable policy is it's got to be across the board and it's got to be federal.

"I think the market should be deciding this. My point is if there's going to be a renewable policy, it should be a nationwide renewable policy that doesn't place individual states at disadvantages.

"Customer education, that's one of the critical roles of the Public Utilities Commission to make sure that the customer education is funded and it's adequate and it's information-based as opposed to opportunities for different entities to promote themselves."

Learning From Others.

"I think the Pennsylvania securitization with PECO is a good precedent. So that's clearly something we've learned. In terms of Massachusetts, I think everybody virtually agreed that the standard offer [transition period] in Massachusetts was too long, so we agreed to something significantly shorter. Ours is called transition service, two and a half years. In Massachusetts the term is seven years.

"We're looking at [California's] securitization proposal again because ours has not passed so, but obviously now there is a referendum that puts that in doubt. Ours [H.B. 651] has passed the House, but did not pass the Senate."

? Plants For Sale.

"I think it's a good development.

"Obviously the NEES assets sold at 1.5 over book [value]. The sale was able to mitigate stranded costs and lower rates. Presumably US Gen, by virtue of the fact that they're very knowledgeable about competitive markets and all the things they've been doing, will be able to have paid the price they've paid and still be profitable and deliver power to customers at affordable rates."

Who's Best?

"I guess I'd have to say Massachusetts