Like it or not, state legislatures around the country must find ways to prepare for looming open-season competition and deregulation in the electricity business. "This snowball is rolling down the hill," a utility executive said to me. There’s no turning back."

As state legislatures wade into the murky waters of electricity deregulation in the next legislative session, here are some questions to ask:

Will consumers be well-served and protected?

Policymakers should aim to prevent price shocks to households, farmers and small businesses and to continue reliable service. Here’s one example: in my home state of Iowa, businesses use computers on a daily basis to provide service nationwide and globally. Electricity is essential to their success, whether they provide pensions, plows or seed corn. Low electric rates with continued reliable service are critically important to Iowa’s individual consumers and businesses.

Will a deregulated electric industry be safe?

Electricity is dangerous and workers don’t get a chance to make more than one mistake. The regulated utilities we’re familiar with have a lot of safety features built into the system,such as well-trained, long-time employees who understand the lethal side of their daily work. A deregulated system, with its emphasis on cost cutting and short-run profit margins, could lead to lower-paid employees with less experience and more deadly accidents.

How will electricity deregulation affect the tax base and revenue stream?

Local governments derive billions of dollars in property tax revenue assessed on the capital equipment of investor-owned electric utilities. Many states tax the sale of electricity to pay for schools and local infrastructure. With deregulation, local utilities may insist on the same tax advantages enjoyed in the name of interstate commerce by their out-of-state competitors. If current local revenue sources are diminished it will cause a shifting of state and local tax burdens onto home owners, small businesses and income tax payers.

What do the workers say?

Our nation’s utilities have invested hundreds of billions in production and distribution facilities — investments made within a stable, predictable regulatory framework that will change dramatically in this new climate of competition. The transition impacts financial markets and causes sudden dislocations of employees as firms reorganize, downsize and spin off secondary enterprises. This can affect whole communities when layoffs in one industry ripple-out to everyone from banks to auto dealers to churches to charities. We must provide for as smooth a transition as possible during a time of reorganization to minimize distress to people, to communities and to financial markets.

What is Congress doing?

In July 1996 a bill was introduced which would bring a fully competitive electric utilities market considerably closer. This legislation, re-introduced during the new Congressional session last winter by Rep. Dan Schaefer, reportedly would give all consumers the ability to choose their own electricity service by December 15, 2000. Maybe there are members of Congress who think we can simply legislate an ending date for this transition, declare it and let everyone scramble to put it all in place. Many of us in low-cost states believe that a more deliberate approach makes sense — and we’re the ones who will have to deal with the fallout. Industrialists in a handful of high-cost states and their elected officials need to move more quickly. At least six high-cost states have already gotten started. But for Congress to order a “one size fits all” approach would be very detrimental.

A rush to deregulate electricity in just a couple of years could lead to widespread bankruptcies, layoffs, community turmoil and the loss of important programs such as energy conservation, environmental cleanup and low-income customer services. The bottom line is that a two or three year deadline just doesn’t work for most of us. There are benefits to be gained from deregulation, but we need the time to make sure that those benefits aren’t overshadowed by preventable and lasting damage.