The Public Utility Commission was replaced with the Regulatory Commission
of Alaska and a 5-member commission panel. In a study commissioned by
the Joint Committee on Electric Utility Restructuring, consultants
recommended postponing any pilot-programs before regulatory reform. The
final report recommended to begin a specific set of market informed
reforms, and minimization of stranded-cost among other detailed strategies.
In May 1998, legislation was enacted to allow retail competition by October
1999. The bill appoints investor owned utilities to become providers of last
resort for customers who do not choose an alternative provider.
All customers in Salt River Project territory are now allowed to choose
alternative supplier. SRP has raised their shopping credit and reduced their
distribution charge passing the savings on the customers.
The Commission has approved Tucson Electric Power's (TEP's) settlement
agreement freezing rates for 8 years with full access by January 1, 2001.
will be allowed to recover stranded costs through a fixed charge and a
charge that varies with market prices.
Legislation enacted in 1999 required retail electric competition to commence
by January 2002. In February 2001, Gov. Mike Huckabee signed SB 236 which
delays retail electric competition until October 2003 and gives the Public
Service Commission ("PSC") the authority to delay until October 2005. In
July 2001, the PSC opened an investigation to determine whether retail
competition should be further delayed to 2005. The PSC's findings will be
further reported to the General Assembly.
AB 1890 was enacted in September 1996 allowing retail electric competition
to begin in March 1998. Following the transition period, utilities can
purchase electricity from any independent party or exchange.
Pacific Gas & Electric (PG&E), Southern California Edison (SoCal Edison),
and San Diego Gas & Electric (SDG&E) can now procure power from any
qualified power exchange during the electric restructuring transition
period. SDG&E is required to refund rate reduction bond proceeds to
residential and small commercial customers.
On February 1, 2001, Governor Davis signed AB1X, which authorizes the
California Department of Water Resources to enter into contracts through
January 1, 2003 to purchase electric power and to resell the power to public
utilities at no more than its acquisition cost. The bill created the DWR
Electric Power Fund in the State Treasury and transfers $500 million from
the state's General Fund to the DWR-EPF to finance its activities.
The Legislature enacted Study Bill 152 in May 1998. The measure created a
29 member Advisory Panel to study the benefits of unbundling retail electric
rates. The results of the study proved retail electric competition would
rates for consumers and that competition was not in their best interest. The
study also revealed that incumbent utilities would have little or no
The Legislature enacted House Bill 5005 in April of 1998. The bill provided
electric retail customers with the opportunity to choose an electric
supplier in January 2000. The bill also requires utilities to provide
standard offer service at a 10% rate reduction through 2004. Utilities must
divest their generating assets in order to recover stranded costs. The PUC
has approved the state's jurisdictional utility implementation and
House Bill 10 was enacted in March 1999 allowing full competition through a
phase-in process. Residential rates were reduced 7.5% and then frozen for
four years, with all other customer class rates' frozen for three years.
Delmarva Power & Light and Conectiv will serve as default providers and
continue suppling meter and bill services during the transition period,
ends September 30, 2002.
District of Columbia
A two-year phase-in of electric competition begins in January 2002.
Residential customers will receive a 7% rate reduction, while commercial and
governmental customers will receive a 6.5% rate reduction over a four-year
period. Utilities are permitted to recover non-bypassable competition
transition charges and net transition cost. Potomac Electric Power Company�s
sell of generating assets in Maryland was approved; proceeds will be used to
recover stranded costs and above book value proceeds will be shared with
In May 2000, Governor Bush issued an executive order creating a 17-member
task force to study electric reliability and gas supply issues. The task
force will conclude it's study with recommendations to the Governor in
December 2001. In January 2001, the Florida Energy 20/20 Study Commission
proposed a plan to restructure the wholesale electric market. To date,
Florida has not enacted comprehensive legislation to unbundle electric
No legislative action was taken in the 2000 Legislative Session this year
there is no anticipation that the issue will be pursued the following year.
Commission has been a supporter of electric restructuring; as a result they
released a report calling for the legislature to introduce deregulation
In March 1997, the Legislature passed HB 399, requiring the unbundling of
costs by electric utilities, cooperatives and municipalities, providing
1,000 residents or more, into generation, transmission and distribution
components. The commission has required some of the utilities in the state
submit unbundled cost analyses. A legislative committee study found, that
with some of the lowest electricity rates in the country, Idaho's electric
consumers would not benefit from retail competition.
IIn June of 1999, Senate Bill 24 was enacted to amend the Electric Choice
and Rate Relief Act (HB362). The measure gives residential customers a 5%
base rate cut in October 2001. Originally, Commonwealth Edison was included
in a four-stage phase-in process that began in October 1999. Under the
amendment Commonwealth Edison must spend a minimum of $2 billion enhancing
its transmission and distribution systems and $250 million to support
environmental programs. Utilities are allowed to recover stranded cost
through securitization and a competition transition charge that will be in
place through December 2006.
During the last three years, the General Assembly has considered electric
competition proposals. A bill was introduced to restructure electricity with
retail access by January 2001 and capped rates for customers from July 1,
1999 through December 31, 2005. The bill did not pass. Since the state has
fairly low electricity prices, the issue of restructuring is not a priority.
Since, the legislation to open competition in October 2002 failed in the
session, there seems to be little chance that the next session will bring
success. Iowans already have such low energy prices it's difficult to gain
support for an electric restructuring bill. Other reasons for restructuring
resistance are how to protect worker benefits in case of divestiture and
consumer protection issues.
The 2000 legislative session failed to debate or pass any of their
introduced retail competition bills. Senator Ranson stated that deregulation
could bring higher rates for residential customers, but that legislators
should move toward open access before its becomes federally mandated. July 2001, there is little interest in unbundling electric rates.
Electric competition studies have been conducted by the Electricity
Restructuring Task Force, which was established in 1998. The study urges
against retail choice since electric prices are so low, but the task force
continue to monitor the issue. The task force believes customers would end
up paying more over the next ten years for electricity because utilities
have to incur the additional cost of complying with federal environmental
In February 1999, the Louisiana Public Service Commission ("PSC") determined
that electric competition was not in the public interest at that time. In
January 2001, the PSC opened a proceeding to evaluate restructuring of the
retail electric market. Interested parties have submitted comments and PSC
Staff has recommended that industrial customers be given the opportunity to
choose their suppliers beginning 01/01/03. Although the PSC Staff did not
recommend PSC approval of retail choice for small commercial and residential
customers at this time, PSC Staff has suggested that this be re-evaluated at
a future date.
As of March 2000, all electric consumers in Maine have the option to choose
their own electric service provider. "An Act to Restructure the State's
Electric Industry" was enacted in May of 1997, making this option possible.
The act requires the phasing-in of retail competition and metering & billing
services during January 2000 to January 2002. Residential rates are reduced
up to 7.5% followed by a four-year rate freeze. Utilities are permitted to
recover stranded cost through competition transition charges or CTC's.
Standard offer providers are determined by holding open bids. Standard offer
rates have been raised to increase competition.
In March 1999, the Legislature enacted SB 300. The measure opened the retail
electric market to competition in July 2000. Provisions in SB 300 allow
utilities to recover 100% of their stranded cost and provides utilities with
the option of selling or spining-off their generating assets to an
affiliate. Baltimore Gas & Electric implemented customer choice in August
2000, after a battle ensued over the Public Service Commission's (PSC's)
order allowed all customers to have choice in July 2000. SB 344, also
enacted in March 1999, allows a 2% gross receipts tax on all Investor Owned
Utilities. The PSC has approved competitive metering and billing, consumer
protection and supplier tariff provisions.
Retail competition began in March 1998; all customers severed by
investor-owned utilities were eligible to choose a competitive supplier. The
Department of Telecommunication and Electricity is investigating whether
metering and billing services should be competitive. Legislation, HB 5117,
was signed into law November 1997 giving customers a 10% rate reduction;
however, there has been little switching activity. Since the switching
was so poor and supporters of deregulation have always encouraged that
higher standard offer rates (available until 2004) increase competitiveness,
department decided to raise the standard offer price for electricity.
The department only approved stranded cost if the utilities divest its
generation facilities, complete retail competition implementation plans,
mitigate transition cost, and comply with rate reduction requirements.
Massachusetts Electric, Eastern Utilities, Boston Edison, Western
Massachusetts Electric Company, and Commonwealth Electric Company
settlement agreements have all been approved by the department.
SSB937 was signed June 3, 2000 providing all customer retail access by
January 1, 2002. Residential customers receive a mandatory 5% rate
discount. Utilities are allowed to securitize and divestiture is not
Michigan Public Service Commission has issued a series of regulatory orders
intended for retail competition.
The Michigan Supreme Court ruled that the Commission did not have the
authority to mandate utilities to open their territories. Nevertheless, both
Detroit Edison and Consumer's Energy plan to voluntarily go along with the
Commission's implementation plan for all customers to have access by
The legislature has not enacted a comprehensive electric restructuring bill
continues to review numerous bills in the 1999 session. The Commission, on
May 21, 1999, opened an investigation into the unbundling and restructuring
electric services. The Legislative Electric Restructuring Task Force
to address the key components for properly unbundling the industry.
State regulator's report show that electric restructuring is not in the best
interest of the public, and as a result suspended its generic electric
restructuring docket, but will continue to monitor the issues in other
Though, several restructuring bills have been introduced and debated during
this legislative session, none where passed. Missouri's Retail Electric
Competition Task Force recommended retail competition only if it can benefit
all classes of consumers. The commission was conducting a pilot program
that recently ended in January 2000.
In December 2000, the Public Service Commission (PSC) ordered retail
electric competition delayed until 2004. In January 2001, SB 243 was
introduced and if enacted delays retail competition until 2007. In March
the PSC determined that under SB 390, it is authorized to regulate MTP
supply rates through 2004.
The 1996 Legislature enacted Legislative Resolution (LR) 455. The resolution
required a study of retail competition and the benefits to consumers. LR 455
was referred to the Natural Resource Committee, which was comprised of an
advisory panel and a forty-one-member task force. In December 1999, the
committee issued a final report concluding the state had little incentive to
implement competition. 2001- There is little interest in the unbundling of electric rates.
Governor Guinn delayed competition indefinitely. All customer classes will
start choosing their electricity supplier at the same time. Many issues such
as stranded cost and provider of last resort have yet to be resolved.
Utilities are to provide all noncompetitive services to their territory
unless the Commission authorizes another entity to provide such services.
The Commission, Governor's Office, State Attorney General Office and Public
Service of New Hampshire reached an "Agreement to Settle PSNH Restructuring"
providing a resolution to stranded cost and rate reduction issues. The
agreement calls for immediate implementation of electric choice; 18.3% rate
reduction; stranded cost recovery and securitization bonds. The commission
has approved restructuring plans for Granite State and New Hampshire
Electric Cooperative. Implementation of Public Service New Hampshire�s
service territory for retail competition has been delayed because
securitization has not occurred, the company is waiting for an IRS letter
regarding the tax effects and the statutory period for petitioning order has
Electric competition laws where enacted January 1999 giving customers an
immediate 5% discount off their electric bills and another 5% over the next
three years. Competition was delayed by several months to allow alternative
suppliers the opportunity to ensure their computer system could handle the
customer needs. Retail access began November 14, 1999. The law provides for
stranded cost recovery up to four years through a market transition charge
and securitization of up to 75% of generation related stranded costs. For
three years after the onset of retail competition utilities must provide
basic generation service for customers who do not select an alternative
provider. Competitive metering and billing is permitted. The commission has
issued rules for licensing and consumer protection standard.
Governor Johnson of New Mexico signed "The Electric Utility Industry
Restructuring Act of 1999". In January 2001, the Legislature enacted Senate
Bill 266. The bill delayed customer choice for small commercial and
residential customers until January 1, 2007 and for remaining customers
until July 1, 2007.
In New York, retail competition is being phased in at different times in
each utility�s service territory through restructuring plans or
�settlements� approved by the PSC. All of the state is open to electric
competition, as of July 2001, but customers have been slow to switch. In
June 2001, 3.5% of electric customers had switched to an electric service
provider. The Commission's Energy Competition Committee issued a Recommended
Decision on July 17, 2001 setting forth the parameters for provider of last
The Study Commission submitted its recommendations to the General
Assembly. Fully competitive retail electric service as of January 1, 2006,
retail choice available to up to 50% of each power supplier's load as of
January 1, 2005; and stranded costs recovery for investor owned utilities
a rate freeze effective through December 31, 2004, and a proceeding before
the NCUC to determine further recovery, if any. As of January 8, 2001, the
General Assembly has said it will not produce any comprehensive
restructuring legislation in the 2001 season.
No action was taken on the issue of electric restructuring in the 1999
of the North Dakota Legislature. For six years a legislative committee has
been studying the issue and is due to file a report in the 2001 session.
On July 6, 1999, the Governor signed Senate Bill 3 allowing electric
customer choice to began in January 2001. According to restructuring laws,
electric rates are to be frozen for five years and residential customers
will receive a rate cut of five percent and shopping credits. Stranded cost
is recoverable until 2005 and all utilities are required to join an
independently operated transmission system. Dayton Power & Light, First
Energy subsidiaries, Cincinnati Gas & Electric, and Monongahela Power�s
restructuring plans have all been approved. Real
competition in FirstEnergy's areas of northern Ohio has been quite limited
after the 1120 MW of Market Support Generation (MSG) was purchased by 3rd
party energy companies then resold.
Oklahoma has several complementing enacted bills requiring implementation
of retail choice by July 1, 2002. Utilities are to functionally separate
transmission and distribution services. Generation assets are to be
transferred to a separate affiliate.
In 1999, regulators adopted Senate Bill 1149, which granted large industrial
and commercial customers access to customer choice by 10/01. Small
commercial and residential customers will continue to be served by their
incumbent utility. In light of the energy crisis in the West, the Oregon
2001 Legislature enacted House Bill 3633, delaying retail competition until
The Electric Generation Customer Choice and Competition Act, HB 1509, was
enacted 12/96. The law permits consumers to choose among competitive
generation suppliers under a phase-in program. The first phase gave
one-third of the state's consumers the ability to choose their supplier in
01/99; two-thirds in 01/00; and the final third in 01/01. More than 72,000
customers participated in the pilot programs that expired 01/99. On June 20, 2001, the PUC issued a final order conditionally approving
the proposed merger of GPU, Inc. and FirstEnergy.
Restructuring legislation was passed in 1996. The law initiated retail
competition in 07/97. In order to foster a more competitive market, the
Commission ordered the incumbent utilities to increase their standard offer
rates. Standard offer service will be available through 2009 at a discount
from present rates for non-selecting customers. The standard offer rate will
decrease over time. Once customers purchase electricity from an alternative
supplier, the incumbent utility is not required to make standard offer
service available for those customers.
Although several restructuring bills have been introduced, there has been
activity on the issue. One of the bills proposed retail access by 01/01/03
a five-year transition period. Another bill would have allowed utilities to
verifiable stranded costs and investments. However, since electric rates in
South Carolina are among the lowest in the nation, there is little chance of
electric restructuring bill being signed into law in the near term.
A study conducted by South Dakota University suggested that electric
restructuring would not be beneficial to the state. However, two laws were
enacted in 1996 giving regulators authority to use incentive rates and allow
flexible and competitive ratemaking.
Tennessee Valley Authority, a federal utility, serves a majority of
and is exempt from state regulation. Although a study commission has taken
up the issue of electric restructuring, to date, no legislation has passed.
In 1999, Texas enacted retail competition legislation that gives all
customers retail choice by 2002. Under SB 7, cooperatives and municipals can
opt-in or opt-out at their discretion. A rate freeze went into effect
9/01/99 and will expire 12/31/01. A 6% rate reduction will go into effect at
the start of competition, which begins 01/01/02. Prior to the start of
competition, IOUs must split into 3 separate companies: (1) regulated
transmission and distribution company; (2) unregulated power generation
company; and (3) unregulated retail electric provider. The pilot program was
scheduled to begin 06/01/01 but has been delayed due to computer problems. A
maximum of 5% of a utility's load in each customer class can participate.
The maximum participation limits have not been met for the residential
segment of the market. However, more than the maximum 5% of commercial and
industrial customers volunteered, so actual participants were chosen through
a lottery process.
Lawmakers in Utah have adopted a "go slow" approach toward electric
restructuring. Their preference is to observe restructuring and the
gained in other states prior to the passage of restructuring legislation.
During the 2001 Vermont legislative session which ended June 4th, several
measures were introduced to unbundle electric rates. Due to the lack of
support, however, the legislature failed to enact a comprehensive retail
electric bill. The Governor�s working group, the Public Service Commission (PSC)
and state�s jurisdictional utilities have spent a considerable amount of
time addressing the questions surrounding the unbundling of electric rates
and the impact it would have on consumers. The result is the same each time;
Vermont will take the �go slow� approach.
In March 1999, Virginia�s governor signed Senate Bill 1269. The measure
allows retail electric competition to be phased-in over a two-year period
beginning in January 2002. Rates will be capped through mid-2007 and all
incumbent utilities must separate transmission, distribution, and generation
by 2002. The commission has released rules for utilities� participation,
proposed rules to implement the functional separation requirements, and
interim rules for electric/gas retail pilot program. The pilot program has
two phases: the first took place in 06/00 and 37,000 customers had the
opportunity to choose their retail providers; in the second phase, which
began on 01/01, over 74,000 customers have been given the opportunity to
expeReince retail choice.
In 1998, following the trend of surrounding states, the Washington
enacted Engrossed Substitute Senate Bill (ESSB) 6560. The bill required the
WUTC and the Department of Community Trade and Economic Development
to study the benefits of retail electric competition on Washington's
system. In 1999, the Commission and the Department submitted a report
identifying those trends affecting the industry and consumers, and
for achieving policy objectives, however, there were no conclusions or
There is little expectation that a comprehensive electric unbundling
will pass during the 2001 legislative session.
The Restructuring Task Force of West Virginia could not come to an agreement
on a restructuring plan for the state. Therefore, the Commission ordered a
proposed plan for electric utility restructuring, HR 27. With this bill
customers will be able to select an alternative supplier beginning in
mid-2001. Large customers will be able to choose their metering and billing
service, as will residential customers within four years. Utilities will be
permitted to sell, transfer, or assign their generation assets. Transmission
and distribution rates will continue to be capped for six years, while
utilities will be required to provide default service for six years.
The state adopted a 7-step plan for implementing electric restructuring.
the Public Service Commission postponed the implementation process
because there were issues with reliability and inadequate wholesale
In 1997, the Public Service Commission (PSC) initiated a series of workshops
to evaluate the benefits of electric competition but subsequently cancelled
initiative after the Legislature expressed concern. Since that time, the PSC
has not revisited the restructuring issue and may not for years to come.