An insider recounts the twists and turns that led to a new state law and new rights for the state's electric consumers. On Dec. 3, 1996, Gov. Tom Ridge signed into law Pennsylvania's Electricity Generation Customer Choice and Competition Act (em a historic statute that will introduce competition in the retail market among suppliers of electric generation. The act passed primarily because of strong leadership from the governor and others.

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.

With the implementation of the Energy Policy Act and the FERC's Orders 888 and 889, competition has been introduced into wholesale power markets. It is limited in scope, however, as utilities are still able to recover their fixed generation costs and embedded cost of capital from their captive retail markets. This limited competition impedes progress towards the development of a more efficient generation system in the U.S. and provides only modest benefits to retail customers.

Currently, generators compete only in wholesale markets and not in retail power markets.

Robert Blohm and Professor William Hogan recently traded op-ed letters in the Wall Street Journal on the "poolco" and "bilateral" models for wholesale power markets:

Writing first, Blohm (an advisor to Ontario's Macdonald Committee on electric competition) praised bilateral trading (individual buyers and sellers agree on price).

Motivated by numerous consumer complaints regarding substantial, unexpected increases in bills for natural gas service, the New Mexico Public Utility Commission has fined Public Service Company of New Mexico, finding that the utility knowingly understated gas cost data in prior adjustment clause filings to avoid commission review of an ongoing gas price crisis.

The commission suspended the $2.2-million fine, however, in light of its decision to prevent PSNM from collecting more than $1.5 million in purchased gas revenues associated with the understated gas cost projection.

The Ohio Public Utilities Commission has refused to modify an earlier ruling that required telecommunications local-exchange carriers to permit their special-contract customers to reexamine their negotiated rates to look for cost-saving alternatives once competition is established in the local market.

The Ohio Telecommunications Industry Association had asked the commission to reconsider the so-called "fresh look" provisions, issued Nov.

The Ohio Public Utilities Commission has reaffirmed its approved guidelines for the provision of "Conjunctive Electric Service" by utilities in the state, rejecting arguments by consumer advocates that the plan won't do much for residential customers.

The guidelines, first approved on Christmas Eve last year, had required the utilities to permit customers of all types to aggregate their loads to derive greater energy savings than they could achieve individually. See, Re

Conjunctive Electric Service Guidelines, Case No. 96-4006-COI, Dec. 24, 1996, 174 PUR4th 96, (Ohio P.U.C.).

In a series of rulings regarding Wisconsin Electric Power Co.,

the Wisconsin Public Service Commission has directed the

utility to reduce electric charges and natural gas service rates.

In a similar ruling, the commission also has authorized Wisconsin Public Service Corp. to boost rates for natural gas, while trimming rates for electric service.

Wisconsin Electric. The commission ordered Wisconsin Electric to cut electric rates by $7.383 million. Rate of return on common equity was set at 10.8 percent.

As part of its ongoing efforts to reform the state's electric utility industry, the New York Public Service Commission has approved a multi-utility, retail-access pilot program for commercial farms and food processors.

Dairylea Cooperative Inc., an agricultural cooperative with 3,500 members and affiliates in the state, submitted the proposal, one of six received by the commission under its recent restructuring initiative.

Regulators in Maine, Vermont and New York have approved the proposed merger of two of the country's largest local exchange carriers, NYNEX and Bell Atlantic Corp.

All three states imposed similar conditions on their approval designed to protect the interests of ratepayers in the region. The conditions also address concern over how the merger might affect competition in the local exchange market, a high-profile regulatory effort already under way in each state.

Vermont and Maine.