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

Fortnightly Magazine - November 15 1998

¼ at least with NEES, because it significantly lowered rates. Rates are lower, customers are getting the opportunity to choose.

"Nothing is absolutely perfect, but from my perspective I think it was pretty good."

PENNSYLVANIA: John M. Quain, chairman, Public Utility Commission; and John Hanger, former PUC commissioner.

From watching deregulation and its aftermath unfold in Pennsylvania, one might conclude that Quain and Hanger often stood on either side of the aisle when it came to competition. Both were appointed to the commission in April 1993. But Hanger wasn't reappointed when his term expired this past April. The former commissioner leaned toward a consumer view; Quain comes from a background of representing utilities. Quain insists, however, that he seeks to bring balance to the process and look for "creative ways to add value from everyone's perspective so that we can get all interested parties to have a stake and make it work." Both men sponsored a formal motion to begin the PUC investigation into restructuring in April 1994. The investigation took two years and came after a July 1995 staff report that advised against changing state laws to allow for competition. In 1996, Quain was asked by the governor to convene a collaborative to develop a piece of consensus legislation, which eventually passed. It led to appeals from the state's utilities that are now being negotiated.

John M. Quain

Pa. PUC Chairman

Deregulating Over Again.

"I don't think I would do it differently. I'm very proud of the process we followed and the results we achieved so far."

Learning From Mistakes.

"There's an awful lot of money at risk and people hold very strong opinions as to how you move from the monopoly environment to competition. On the utilities side and on the consumer side.

"We needed to go through the process of litigation. We needed to go through the process of decision making and the process of negotiating results to try to achieve the balance that gives everybody a stake in the outcome."

ISO vs. Transco.

"I think every state regulator who's part of a grid wants to have an appropriate level of influence on the development because it's important to the region, the development of competition."

"I don't hold a strong opinion on [ISOs vs. Transcos] at this point. I'm still looking at the issue."

Interventionist or Free Market?

"We've taken a very proactive role on consumer education, a less active role in terms of labeling. It's very important that consumer education be just that - education and not marketing."

Learning From Others.

"We looked very carefully at the California approach, and tried to factor in how to reduce the controversy surrounding the passage of that bill. And I think we did that through the use of the collaborative process [for] ¼ comprehensive legislation."

Plants For Sale.

"You've got to look at that on a case-by-case basis and look at the specific generation units that are up for sale. We've got two companies in Pennsylvania that have indicated an interest in divesting themselves of their generation and simply becoming a