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News Analysis

The General Trend
Fortnightly Magazine - September 1 2001


News Analysis


California's electric power crisis loomed in the background as lawmakers in a number of other states met in session in 2001 and decided by and large to delay the introduction of electric utility deregulation. Some state legislatures appeared unsure of whether the problems with deregulation this past year were California-specific or innate flaws with electric restructuring, but most were willing to wait and see.

Nevada took the strongest stand. Shortly after the governor of Nevada delayed competition indefinitely, the legislature passed Assembly Bill 369 into law, which effectively ended retail access. The law continues regulation of the state's utilities and prevents the sale of generation facilities before July 2003. (In subsequent legislation, however, the legislature passed AB661, which would allow any industrial and commercial customer with a load of greater than one megawatt to choose an alternative retail electric supplier.)

Virginia, by contrast, held out the most hope for advocates of restructuring. Facing a first-of-the-year starting date, the Virginia legislature elected not to pass House Bill 2744, which would have allowed the state corporation commission to delay the starting date until January 2006. Virginians are now looking to an electric competition starting date of January 2002, with full implementation by January 2004. But while Virginia refused to delay the beginning of retail access, the legislature did take action to implement consumer safeguards by passing Senate Bill 1420. That bill will allow the SCC to designate a default service provider and establish rates based on market conditions. The bill also incorporated Senate Bill 1258, which caps the incumbent utility's rates until the year 2007.

The General Trend

Among the states that took action in this past year regarding electric deregulation, the most common response was to delay the date to begin competition. For example, four states facing relatively early starting dates-Arkansas, Montana, New Mexico, and Oklahoma-delayed competition through legislative action, as illustrated in the table. Nevada, where Governor Guinn used the authority provided to him in the restructuring legislation, delayed deregulation indefinitely as an executive action.

In most of these cases, the state legislatures simply postponed the beginning date of competition in electric industry. In Arkansas, for example, Senate Bill 236 pushed the starting date of retail access back to Oct. 1, 2003 from a previous start date of Jan. 1, 2002. The Montana legislature extended the transition to competition until July 1, 2006 with House Bill 474. Previously, the Montana Public Service Commission had delayed the beginning of competition until July 2004, which was the latest start date allowed in the state's restructuring legislation. Moreover, HB 474 will allow Montana customers served by an alternate supplier to switch back to default service, provided that the power is not resold.

No Pirating, Please
Excerpts from Idaho's new retro electricity law.

Let's Promote Harmony:

"This act and its amendments are designed to promote harmony among and between electric suppliers furnishing electricity within the state of Idaho, prohibit the 'pirating' of consumers of another electric supplier, discourage duplication of electric facilities, actively supervise certain conduct of electric suppliers ... and stabilize