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Deregulation Explained

UPDATE - January 15, 1999

The state legislatures of both North Carolina and South Carolina have been studying the issue of electric power industry restructuring, or deregulation, since 1997. Some bills have been introduced, but no bill has gone beyond subcommittee. It is uncertain what action the state legislatures will take and when that might be. Both states have been pursuing a careful, deliberate process of gathering data, hearing from all points of view, and learning from the early experiences in the few states that have begun implementation.

See brief updates below on:

North Carolina. The deregulation issue is being studied by a special 23-member commission set up by the N.C. General Assembly in 1997. The panel held eight public hearings across North Carolina during 1998 to get citizen input. The commission has initiated a variety of studies, including analyses on rates, tax implications, stranded costs, reliability and economic impact. The studies are expected to be completed during 1999. Most observers think that the study commission will not be ready to submit its final report until the "short session" of the legislature in the year 2000.

Members of the panel include: 12 state legislators, representatives of the four major power suppliers in the state, two residential consumers, one commercial consumer, two industrial consumers, a power marketer and an environmental advocate.

South Carolina. In late 1998, the Senate Judiciary Committee named a 19-member task force to study the restructuring issue. The House Utility Subcommittee has been studying the issue since early 1997. No bill has been reported out of subcommittee. The 1999 legislative session began January 12.

The S.C. Public Service Commission (PSC) issued a report on deregulation in Feb. 1998 in response to a request from the Speaker of the House. The Commission did not pass judgment on whether deregulation is necessary or advisable but outlined a five-year transition plan should lawmakers decide to go forward with it. The report "cautions that there may be little to gain and much to lose by being on the leading edge of a restructuring movement." It also says radical change "should not be undertaken without a thorough understanding of the implications to existing and future customers." The PSC report says "the current system is working well" in South Carolina.

Federal. Restructuring the electric industry is expected to be an issue on the table in the 106th Congress, which convened Jan. 6, 1999. A number of bills on the issue were introduced in 1998, but none made much progress. The Clinton administration proposed a bill in 1998 to encourage states to begin retail competition by 2003 (but would allow states to "opt out").

Other states. Eighteen states have approved plans for moving to retail competition, a few as early as 1998 and others as late as 2004. Three states have begun full implementation of retail competition: Rhode Island as of 1-1-98, Massachusetts as of 3-1-98 and California as of 3-31-98. Two-thirds of Pennsylvania customers can participate in retail competition as of January 1999.

Below are the states that have approved deregulation plans:

Legislation (12) full-competition dates:

RI - Jan. 1, 1998

MA - Mar.1, 1998

CA - Mar. 31, 1998

NH - Jul. 1, 1998 (on hold pending lawsuit resolution)

NV - Dec. 31, 1999

ME - Mar. 1, 2000

CT - Jul. 1, 2000 (phase-in starts Jan. 1, 2000)

PA - Jan. 1, 2000 (phase-in starts Jan. 1, 1999)

IL - May 1, 2002 (large customers start in Oct. 1999)

OK - Jul. 1, 2002

MT - Jul. 1, 2002 (large customers start in July 1998)

VA - Jan. 1, 2004 (phase-in begins in 2002)

Commissions with "final" orders (6):

AZ - Jan. 1, 2003 (scheduled Jan. 1, 1999 phase-in delayed due to court order)

MD - July 1, 2002 (phase-in starts July 1, 2000)

NJ - July 1, 2000 (pending additional ruling)

NY - start date being negotiated with each utility, some begin during 1998

MI - Jan. 1, 2002 (phase-in may start in 1999 or 2000)

VT - Dec. 1998 (on hold pending companion legislation)

Links to Related Sites:

N.C. Sites
Utilities Commission
General Assembly

S.C. Sites
Carolina Power & Light Company
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