And why policy on
stranded costs defies
a traditional legal or
economic analysis.
There are sound economic reasons why policymakers should allow electric utilities to recover stranded costs through a competitively neutral network access charge, or some similar fee. First, differences in the quality of utility management appear to have contributed little to differences in electricity rates among states.
Favoring a uniform federal mandate, but also a drawn-out transition period to let the industry "prepare" itself, Sen. Dale Bumpers (D-Ark.) has recently introduced federal legislation on electric industry restructuring with the admonition that new laws should assure benefits to residential consumers (em not just the large-load customers.
Bumpers, ranking Democrat, Senate Committee on Energy and Natural Resources, on April 7 addressed the American Gas Association's Natural Gas Roundtable in Washington, D.C., on electric restructuring, talking about his introduction of S.
Electric's Players Tell Senate Panel Where to Jump In, Butt Out
With three hearings behind it, what has the Senate panel on electric restructuring learned from regulators, utility execs and other industry types who have testified?
Granted, some candor has emerged from all the maneuvering and positioning typical of electric industry and sector leaders, but is that enough for the Senate Committee on Energy and Natural Resources to develop a position on federal legislation, without input from energy consumers and the voting public?
Sen. Frank H.
Responding to a call by Tennessee Valley Authority's Chairman Craven Crowell to eliminate the $106-million, annual appropriation provided to it, Representatives Bob Franks (R-NJ.) and Marty Meehan (D-Mass.) on Feb. 5 introduced a bill to end that federal payment.
The congressmen, who also co-chair of the Northeast-Midwest Congressional Coalition, distributed a study outlining the $1.2 billion in annual indirect taxpayer subsidies provided to TVA.
Introduced in the 105th Congress
• H.R. 296, sponsored by John Shadegg (R-Ariz.). Would privatize the federal Power Marketing Administrations, splitting them into regional corporations to market and maintain generation and transmission services. Stock would be sold to recover outstanding federal debt; holding companies could invest in the corporations.
• H.R. 338, sponsored by Cliff Stearns (R-Fla.). Would repeal Section 210 of the Public Utility Regulatory Policies Act (PURPA) of 1978, but would force utilities to honor QF contracts entered prior to Jan.
The Heritage Foundation's recently released report, which finds that national electric deregulation would benefit consumers through lower electric rates, better service and more jobs, has the endorsement of a key policymaker.
If Congress passes a bill to deregulate electric markets, the average consumer's monthly electric bill could fall by as much as $30, according to the report, Energizing America: A Blueprint for Deregulating The Electricity Market, written by Adam D. Thierer.
The report has been endorsed by House Commerce Committee Chairman Thomas J.
The electric industry hasn't seen so much upheaval since Thomas Edison threw the switch at the Pearl Street Station. Full retail access to competitive markets in generation and supply will challenge traditional ways of doing business. But no change will prove more dramatic for electric utilities than setting a competitive price (em that most fundamental of business decisions.
In anticipation of competition, utilities have been experimenting to discern what forms of the "product" (em electric power (em customers might want, and at what prices. One such experiment is real-time pricing.
Prometheus paid dearly when he stole fire from the gods and gave it to man, but his courage paid off. Fire now belongs to the people. So should electricity, says New York state Judge Joseph Harris, of Albany, who ruled last fall that state regulators could force open New York's electric industry, but warned against hidden favoritism:
"Prometheus," wrote Harris, "in breaking the monopoly of the gods and by giving electrical energy to mankind ... [should] not be demeaned by a mere transfer of that monopoly to the lords of industry.
The Georgia Public Service Commission (PSC) has approved its first negotiated contract for discounted electric rates under an economic development incentive plan adopted in 1994.
Georgia Power Co. filed the contract in May after Olin Corp. announced it would relocate 100 manufacturing jobs to Tennessee unless the company could negotiate power rates.
XENERGY, Inc., an energy services company, began supplying power to 13 companies in midsummer as part of Massachusetts Electric Co.'s restructuring plan. The companies belong to the Massachusetts High Technology Council. XENERGY will supply 40 Mw of power per year. Projected annual savings to the companies run about $2.2 million, or 14 percent, a drop of 2¢/Kwh. The wholesaler is NYSEG Bulk Power Sales Group; Mass. Electric will provide customer and distribution service. A residential pilot is scheduled to begin January 1.