Kilowatts by Choice, Ready or Not

Fortnightly Magazine - November 1 1997
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A state-by-state look at retail competition.

RHODE ISLAND'S CUSTOMER CHOICE PROGRAM FOR LARGE-industrial and government consumers is five months old. California consumers will see retail choice on Jan. 1. New York, Illinois, Idaho and Washington have pilot programs well under way. And a statewide pilot program was set to begin this month in Pennsylvania.

Yet retail choice may prove vulnerable in New Hampshire (em the one state that has shown the greatest commitment to retail choice. The dogged determination by regulators not to surrender all the consumer benefits to a rescue package has tied up the issue. It was in New Hampshire that state regulators opposed any automatic full recovery of utility transition costs, only to see their decision taken up on appeal to the courts, where it may lie "stranded" for some time.

Here, at some risk (the story changes daily), is a quick breakdown of how a good many of the states stack up on retail choice.

Mandates Set, Deadlines Looming

One group of states appears noticeably ahead of the rest, with fixed, mandatory deadlines for full competition, forged through joint action by utility regulators, the state legislature and the governor.

California. The Public Utilities Commission continues to march toward its Jan. 1 deadline. It has ordered utilities to give consumers unbundled bills (generation, transmission and distribution) by June 1998 and approved rate reduction bonds for the three biggest utilities. %n1%n In July, the PUC began accepting registration for electric service providers; more than 100 ESPs had paid the $100 fee as of September. %n2%n

Maine. The Public Utilities Commission is striving to set up restructuring under the law signed by Gov. Angus King on May 29. The law %n3%n calls for supplier choice to begin March 1, 2000. To get there, the PUC has outlined an ambitious timetable for dealing with the 13 rulemakings (em including billing and metering services; sale and capacity of energy; marketing; renewable resources; and bill unbundling (em needed to achieve that goal. %n4%

In July, the PUC appointed a 15-member Consumer Education Advisory Board, including utility, industrial, consumer and legislative representatives.

Massachusetts. Massachusetts Electric Co.'s pilot was approved last year by the Department of Public Utilities. XENERGY, an unregulated subsidiary of New York State and Gas Co., provides power to 14 commercial or industrial customers. The companies saved an average of 14.5 percent during the first year, XENERGY says. Retail and small business customers have saved 4 to 18 percent, according to Massachusetts Electric President Larry Reilly. In July, the DPU told companies interested in participating in the statewide customer choice program, scheduled for Jan. 1, to begin registering. The DPU is holding discussions on changes in metering, billing and information services.

Michigan. A June commission order %n5%n set deadlines for retail choice with a plan to open 2.5 percent of each utility's load to competition this year and another 2.5 percent every year through 2001, with all remaining customers receiving choice on Jan. 1, 2002. Once that date arrives, the Michigan Public Service Commission wants only those states that allow Michigan utilities to