Some states have become well-known for their regulatory or legislative initiatives on electric restructuring and customer choice. Among those drawing the greatest attention are California, New Hampshire, Rhode Island, Massachusetts, New York, and Texas.
At press time, reports were filtering in of legislation about to be introduced in Montana and North Carolina (em states that might be considered unlikely subjects for competitive initiatives. Restructuring activity was also seen developing in Missouri, Connecticut, Minnesota, Washington, Louisiana and Arkansas, as noted below:
This March, the Public Service Commission opened a docket to focus specifically on retail electric competition issues (Case No. EW-97-245) and intends to shortly establish a task force. Since the commission does not view restructuring as within its jurisdiction, it has looked to the Legislature to set direction. On the legislative front, "enabling" bills were introduced in both the House and Senate in early March (H.B. 801 and S.B. 450); if enacted, the PSC would be permitted to develop competition in retail electric service and introduce retail pilot programs. The PSC has already approved an experimental retail choice plan for Utilicorp's Missouri division. This two-year pilot is limited to 10 customers with at least 20 delivery points and 2.5 MW of demand; so far, McDonald's is the only scheduled participant.
The Legislature's Electric Industry Restructuring Task Force released its final report in late December. The group was unable to reach consensus and failed to make specific recommendations on whether the state should move to retail choice or whether utilities should receive full stranded cost recovery. Stakeholders in the restructuring debate have remained divided. With the advent of retail competition next year in neighboring states (New Hampshire, Rhode Island and Massachusetts), Connecticut is facing increasing pressure to address the issue.
While several restructuring bills were formally introduced early in the year, for the most part these were either generic statements of principle or plans without specific details. However, a bill introduced in February by the House Energy and Technology Committee consolidated many of the previous bills and represented a step toward compromise. Under H.B. 6774, all customers would have choice of generation suppliers by Jan. 1, 2000. Utilities would be allowed to recover 100 percent of their regulatory assets and above-market costs for contracts with independent power producers, but only 75 percent of the stranded generation plant assets.
The Minnesota Public Utilities Commission has not conducted any further formal investigations since issuing generic principles in 1995. There has, however, been significant activity on the legislative front this session. Two bills (H.B. 1299 and S.B. 1820) propose reorganizing the Electric Energy Task Force as a legislative committee on utility competition and requiring recommendations by early 1998. Another bill (S.B. 1344) proposes a study of retail wheeling and restructuring by the Department of Public Service by early 1998. Yet another bill, S.B. 1348, proposes a transition to retail competition by 2002 and pilot programs beginning in late 1997. The state is still wrestling with tax-impact issues, so it is unlikely that anything more than a study bill could be passed before the scheduled end of the legislative session in mid-May.
Although the Washington Utilities and Transportation Commission has not done much since it issued generic principles in 1995, it has approved specific utility pilot programs or tariffs for two utilities. In March 1997, for example, the UTC approved an experimental direct-access pilot for 1 percent of Washington Water Power's residential and commercial customers; a similar experiment was approved for the utility's larger customers last year. Although there is unlikely to be consensus on a restructuring timeline before the end of the scheduled session in late April, there has been significant legislative activity this year. Several bills (H.B. 1652, S.B. 5639 and S.B. 6006) proposed allowing retail choice for all customers by no later than July 1999. A task force to study and develop recommendations for restructuring was proposed in H.B. 2232.
The Louisiana PSC began reviewing competition issues in June 1996 (Docket
U-21453). In response to a seven-year restructuring plan filed by Entergy, the PSC ruled in March that issues involving deregulation must be considered in the rulemaking docket. The PSC is expected to begin hearings on restructuring issues soon. Several bills were introduced in the House at the beginning of the regular session in late March. One group of bills (H.B. 1405 and H.B. 1654) proposes authorizing the PSC to set up a pilot program and repealing prohibition of electric utility competition. Several specific deregulation bills (H.B. 1524, H.B. 2061 and H.B. 2200) propose introducing retail choice by either 1999 or 2001.
While the Arkansas PSC has not initiated any formal restructuring activities to date, there has been some limited activity on the legislative front. "Study" resolutions (S.C.R. 24 and H.R. 1026) were introduced and adopted in both the House and Senate during March 1. t
Attorney Kenneth M. Simon leads the electric power practice of Dickstein, Shapiro, Morin & Oshinky, LLP, in Washington, D.C.
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