Electric Competition Moves On
The recent months have brought a flurry of activity in a number of states:
ARIZONA: The Arizona Corporation Commission approved rules opening Arizona's electric industry to competition over a four-year period starting in 1999. The rules allow retail customers to retain standard electric service, or to choose competitive services.
Beginning Jan. 1, 1999, utilities must make available 20 percent of its peak 1995 demand to all customers, including small business and residential. No more than 50 percent of that amount may be sold to large customers, and 15 percent of the total will be reserved for residential customers.
Starting on Jan. 1, 2001, 50 percent of a utilitiy's peak 1995 demand must be available competitively. Thirty percent of that total must be reserved for residential customers. Finally, on Jan. 1, 2003, 100 percent of the total electric supply will be available on the competitive market.
All electric companies will have to get commission approval to provide competitive services. Although early drafts of the commission's proposal excluded the Salt River Project from participating in the competitive market, SRP was allowed to participate by signing an intergovernmental agreement. However, a hearing regarding SRP, a municipality serving 635,000 customers, will be held prior to final approval.
Several issues remain to be decided, including how to deal with stranded-cost recovery. The commission is holding a series of workshops to decide such issues.
COLORADO: The Colorado Public Utility Commission released a 125-page electric restructuring report, which is a compilation of responses to a PUC questionnaire. The report, which is intended for information purposes only, was
distributed to legislators, the governor's office and members of the utility community.
"We've packaged the various perspectives into a single report to give the reader a broader and deeper understanding of what the issues are," said PUC Director Bruce Smith. Both the report and the 40 responses are available through the PUC Web site at http://www.puc.state.co.us.
GEORGIA: The Georgia Public Service Commission has decided to initiate a series of electric restructuring workshops starting in April to explore the issues that will be encountered in the move to a competitive environment.
It said that regulatory reform has not been as urgent in the southern states where electric rates historically have been lower than the national average.
"While we certainly have a lot on our plate in facilitating telephone competition and in deregulating the natural gas industry, it is important that we prepare for electric restructuring expected in the coming years," said PSC Chairman Dave Baker.
Meanwhile, the Georgia General Assembly is preparing to enact legislation deregulating the gas industry in the spring session. The Georgia House and Senate Gas Study Committees last December had issued their findings to the legislature.
INDIANA: Indiana state Rep. James Bottorff (D) and state Senator Morris Mills (R) have introduced legislation in the Indiana General Assembly allowing all customers to choose their electric suppliers by mid-2004. During a five-year transition period, electric rates either would be frozen or gradually lowered to a state average price.
Customers would choose their power supplier as early as Oct. 1, 1999, by paying a "market access charge." After Jan. 1, 1997, no new requests to increase base utility rates may be filed with the Indiana Utility Regulatory Commission. Quarterly fuel-price adjustments would continue until July 1, 1999. At that time, utility rates would be frozen. Utilities with rates above the state average would have to gradually lower their rates to a state average price between Oct. 1, 1999 and July 1, 2004.
Customers who do not select an electric supplier will have one designated for them by the commission. All electric generators and marketers must offer a "green" power option, which would allow consumers to choose an environmentally friendly supplier. Customers of Indiana's municipal and rural electric co-ops could vote to opt out of competition.
The bill has the support of American Electric Power, CINergy, Indiana Industrial Energy Consumers Inc., and Indiana Manufacturers Association.
MONTANA: Montana Power Co. has advised the Montana Public Service Commission on how to restructure the state's electric industry. A new docket was created to allow the Montana Legislature to review competitive issues first.
Montana Power proposes that Montana phase in competition during a transitional period through July 1, 2002, when all customers would have the opportunity to choose their electric supplier. A "universal systems benefits charge" would pay for low-income services, energy efficiency programs, renewable energy programs and research and development. A
competitive-transition charge would be imposed to pay for stranded costs. Generation would become unregulated and competitive.
The Montana PSC had conducted a roundtable hearing on restructuring early in 1996, and had issued its statement on principles for restructuring in May 1996. "We believe our informational filing addresses these principles, and becomes the first documented proposal offered in Montana to define a transition to electric power supply choice," said MP Vice Chairman and President Robert P. Gannon.
(em Lori A. Burkhart
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