States Must Lead Utility Restructuring
Electric utility restructuring is an issue that states must address, and
states cannot afford to make cost the only consideration. "The idea that the
federal government will remove the hard choices or dictate the options is
nonsense," stated Ralph Cavanaugh of the Natural Resources Defense Council.
"The federal government will defer to states on issues that states
traditionally handle." He urged lawmakers to
explore their options, as decisions left unmade will be decided in board rooms.
The potential benefits of utility restructuring — namely lower
consumer costs — are well-known. "Utility
costs account for five percent of median household incomes" with an even
higher percentage for the elderly and indigent, noted Chris Baker, Analyst at the
AARP Policy Institute.
From there, possible impacts of deregulation become much murkier
and more difficult to predict. Nonetheless, there are critical questions to answer
if states are able to successfully engage in the utility deregulation debate.
Montana state Rep. Steve Doherty, citing deregulation efforts in
Montana, noted that there are some "right
questions" that must be asked to avoid surprises after deregulation has occurred.
Issues that lawmakers should address before casting votes include: net
job changes; utility reliability; the need for incremental steps to deregulation;
and resultant tax base changes.
Deregulation experiences in Washington state were similar to
those of Montana. Washington state Rep. Mike Cooper acted as part of a
"common sense" coalition made up of members of AARP, the Grange, the
International Brotherhood of Electrical Workers (IBEW), Reform Party, labor
and Republicans from rural districts. The coalition demanded answers to
many of the questions Doherty posed. Held up to this level of scrutiny, the
Washington bill failed. In its place, Washington state passed a consumer
protection bill that forces future deregulation attempts to begin with fairness and
consumer interests as first priorities.
Following the Washington model, it will be up to individual states to
provide leadership in utility restructuring efforts. States must be prepared to
fix problematic bills. States will be responsible for ensuring that
hometown utilities continue to provide for local customers and that no one is left
without electricity. States must also look hard at environmental implications
and stranded costs from utility restructuring — and make sure consumers
really do benefit.
