DEREGULATION UPDATE

Across the Nation

Residential Rates a Priority for Texas Senator

In an interview with the Austin American Statesman, Republican Senator David Silbey said that unless deregulation cuts residential rates by 15 to 20 percent, there’s no need to open the state’s electric utility industry to competition. Silbey is chairman of the Senate of Economic Development Committee and the Texas Senate Interim Committee. It is likely that his opinions will influence the 31-member Senate, where GOP currently has a 17-majority vote.
(Austin American Statesman, March 14, 1998)

Clinton Calls For Customer Choice

The White House offered its plan to let consumers choose their electricity providers by Jan. 1, 2003. With a number of states already implementing and developing restructuring legislation, the White House proposal would let states opt out of the federal plan. The plan calls for more use of renewable energy sources, a $3 billion per year fund for public benefits programs, consumer information on environmental impacts, prices of power sources, broader controls over power plant smog-forming nitrogen oxide emissions, and recovery of "reasonable" stranded costs.
(Reuters, March 25, 1998)

Competition in the Constitution State

An electric deregulation bill was passed in both houses and now awaits the signature of Gov. John Rowland. After four hours of debate, the chamber approved the measure by a vote of 126-17. That same day, the senate approved the measure by 27-7. If enacted, the legislation would deregulate the state’s electric industry – starting in about 20 months – by giving 35 percent of the customers in the most populous areas direct access on Jan. 1, 2000. The balance of the state’s customers would be allowed to choose six months later. The bill, which promises a rate cut of 10 percent, allows utilities to recover their stranded costs. However, the value of their assets must be determined by putting them up for sale to learn their true market value.
(Energy Online, April 16, 1998)

New York's Retail Choice Pilot

Con Edison announced that 36,862 customers have registered for "Retail Choice," New York’s pilot program. In just 15 days, 356 of the 500 megawatts available for the program’s first phase have been pre-empted. Retail Choice is giving customers the option to choose from 20 energy services companies registered with the New York Public Service Commission. The program begins June 1, 1998 and runs through March 31, 1999.
(PRNewswire, April 16, 1998)

Conclusions From California

In a recent survey conducted by The Second Opinion, an Atlanta-based marketing research firm, California’s large commercial and industrial end-users, small and medium-size businesses, and residential customers were asked questions about deregulation and marketing. Phase I research showed:

• Customers are very aware that deregulation is occurring, but have not been compelled to shop around for new energy suppliers;

• Californians are frustrated they don’t have needed information on electricity providers;

• Price is an important factor in choosing a provider, but a closer look at the results revealed that customer service is more critical.

The second part of the research will be conducted this fall and will provide insight into how customers and providers change after the market actually opens.
(PRNewswire, April 8, 1998)

Advantica Agreement

Houston Industries’ Major Accounts Group has been selected by Advantica Restaurant Group for an exclusive energy service agreement involving more than 500 restaurants throughout California. The contract was set to begin on March 1, and includes natural gas, electricity and energy services.
(Electric Light & Power, April 1998)

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