In our vision of the future, today's distribution function will be divided into two companies (em a poles and wire function and a merchant function. The merchant company would provide value-added products and services to the customer. We have used credit cards, branding, and other marketing gimmicks to sell our services, particularly demand-side management (DSM). In the future, however, I think there will be greater emphasis on the types of energy-purchasing alternatives we provide. Pricing options are one offering that we would expect to expand.

Donald Pardus

Chairman & CEO

Eastern Utilities Associates

Eastern Utilities is committed to creating a company and a culture that goes beyond just delivering electricity. Our primary goal is to compete not just on price but on the value of the total service provided. Customers are the driving force in any competitive marketplace, and our commitment to our present and future customers is to deliver services that the customer values and needs.

Randall Hardy

Administrator

Bonneville Power Administration

BPA's central role in the Northwest has no counterpart among the other PMAs proposed for privatization. We hold approximately 45 percent of the market share, serve 85 percent of our customers' load, and provide rate benefits for 85 percent of all Northwest residential consumers.

By contrast, the other PMAs have less than 10 percent of the market in their respective regions.

B. Jeanine Hull

President, Electric Generation Association

Vice President & General Counsel, LG&E Power Inc.

PURPA is not the issue; competition is. PURPA has introduced competition by demonstrating that the generation of electricity is not a natural monopoly. PURPA's faith in competition has proven itself in the form of lower-priced electricity for ratepayers. PURPA has also promoted fuel diversity by creating incentives for utilities to consider renewable fuel options for portions of their capacity needs.

The structure of the utility and telecommunications industries has changed significantly since I began my role as a regulator 15 years ago. Technological developments and a competitive environment, as opposed to regulation, have provided the major catalyst for change. As a result, utility companies, which have historically enjoyed the favor of Wall Street investors, will soon face unprecedented revenue growth problems.

The Maine Public Utilities Commission (PUC) has decided to investigate the need for changes in existing regulations for water rates as a result of "drastically increased" water treatment, filtration, and supply costs. While rejecting calls for immediate changes in rate design, a shift to volumetric interclass cost allocation, and special low-income rate schedules, the PUC decided to open two separate inquiries to determine whether formal rulemakings were required.

The West Virginia Public Service Commission (PSC), on rehearing of an earlier rate order, has reduced the level of emissions control investment in rates for two electric operating subsidiaries of Allegheny Power System, Inc., Potomac Edison Co. and Monongahela Power Co. The PSC excluded one-half of the difference between amounts actually spent and those budgeted for emissions plant needed to comply with the Clean Air Act Amendments (CAAA), finding that the budget was nearly a year old and did not qualify as a "known and measurable" change in rate base.

The Louisiana Public Service Commission (PSC) has turned down a request from South Central Bell, a telephone local exchange carrier (LEC), to switch its form of regulation from the existing incentive-based rate plan to a pure price-cap plan. Under its proposed plan, the LEC would freeze rates for basic residential services for a three-year period, and then cap rate changes based on the rate of inflation. Rates for interconnection and nonbasic services would be market-based.

The Michigan Public Service Commission (PSC) has approved terms for interconnection and mutual compensation between Ameritech Michigan, a dominant local exchange carrier (LEC), and City Signal, Inc., a newly certificated competitive provider of LEC services. The move marks another step in the PSC's experiment with local telephone competition in the Grand Rapids exchange.