A fierce debate has erupted in the utility policy community, with battle lines drawn within FERC itself. In the effort to improve system efficiency, two competing alternatives stand out: to build...
when Ohio's retail electric market was opened to competition in 2001, the Public Utilities Commission of Ohio certified 38 suppliers to sell electricity to all customer classes. By the end of 2002, just two suppliers were actively marketing to the state's residential customers.
Explaining away what might seem a modest success at customer switching, the OCC report notes that through 2002, approximately 813,000 residential consumers statewide-or about 20 percent of those who are eligible to participate in electric choice-actually switched electric suppliers. However, more than 90 percent of those who switched suppliers participated in one of the more than 190 community aggregation groups in the state, and about 98 percent previously bought their electricity from one of the three FirstEnergy companies (Ohio Edison, Toledo Edison, and Cleveland Electric Illuminating). Residential customers in Central and Southern Ohio, and in the Miami Valley, have had virtually no choices for alternative suppliers, according to the OCC.
The OCC concludes that "prompt and decisive" action by the PUC is needed to ensure that residential electric customers receive the benefits-and the safeguards-that Ohio's electric choice legislation intended. One such action is directed at moving forward with regional transmission market reforms. The OCC said that it has filed formal complaints against American Electric Power (AEP) and Dayton Power and Light (DP&L) for failing to comply with the provision of their transition case settlements requiring them to turn over operational control of their transmission systems to an approved independent regional transmission organization (RTO). The OCC has asked the PUC to:
(a) suspend payment of transmission costs to the utilities; (b) levy fines against the utilities; and (c) limit the utilities' ability to move to market-based retail rates at the end of their market development periods. Both AEP and DP&L have argued that the PUC has no authority to consider the OCC's complaints, let alone impose these remedies.
Virginia SCC Sees SMD/Market Problems
The Virginia State Corporation Commission (SCC) formally has expressed concern that adoption of new rules governing wholesale power market design at the federal level could result in an "involuntary (or possibly inadvertent) loss of day-to-day authority over the price and reliability of electric service" for Virginia citizens.
On Jan. 3, 2003, the SCC released a detailed review of the proposed standard market design (SMD) initiative currently under way at the Federal Energy Regulatory Commission and potential risks to electric service in Virginia. The SCC suggested that the state legislature suspend electric deregulation for the time being, noting that the state was particularly vulnerable to loss of authority over retail electric prices and reliability because rates had already been unbundled and the state restructuring law currently requires utilities to join an RTO. It said that such a suspension, including the reversal of the mandate placed on electric utilities to join an RTO, could allow the state the opportunity to determine whether Virginia should be part of the new federal regulatory system and whether retail choice should continue at this time. The SCC said that state policy-makers should "decide promptly" to proceed with, or delay implementation of the state's