Date: Fri 28-May-1999

Publication: Bee

Author: CURT

Quick Words:

electric-deregulation

Full Text:

Competition Off To Slow Start As Public Educated About Deregulation

By Diane Scarponi

Associated Press

HARTFORD -- Connecticut's electric deregulation law has not generated any

competition.

No electric companies have registered to compete for the state's 1.3 million

electric customers, even though they can start signing up customers July 1.

The state agency that licenses electric competitors said it's not worried

about the absence of competitors.

Some companies are waiting for regulatory issues to be resolved, said Beryl

Lyons, spokeswoman for the Department of Public Utility Control.

"We've heard of or we know of companies interested in applying," Lyons said.

But the Office of the Consumer Counsel, a state watchdog agency, said the slow

pace may mean that companies are not yet interested in Connecticut.

"We're concerned a perception's been created that this isn't a place where

competition is happening," said Eugene Koss, assistant consumer counsel.

Deregulation also got off to a slow start in Massachusetts and Rhode Island.

Competitors around the country are looking to make money in Connecticut and

other states, but they are waiting to see what the ground rules are, said

Chuck Coyne, a manager at Northeast Energy Systems Inc. of Framingham, Mass.

Coyne said energy companies are especially interested in how utility

regulators treat existing utilities and whether the rules are set up to allow

for good competition.

"There's a lot of inside baseball going on," he said.

In the meantime, utility regulators and Connecticut Light & Power and United

Illuminating Co. are working to educate people about the new system. Starting

in the year 2000, people will be able to choose their electric companies the

way they now choose their long-distance telephone companies.

"Electric restructuring is all about choice, and sometimes it's very difficult

to make choices in an industry that has always been a monopoly," said Fran

Mayko, a spokeswoman for UI. "Now people have to think seriously about who

their power supplier's going to be."

Under the law passed last year, utilities are required to give competitors a

list of their customers, unless the customers request their names not be

released.

The utilities this month sent out with their bills a notice that allows

customers to take themselves off the list. CL&P's deadline is June 15; UI's is

June 28.

Electric companies can still get names and addresses through street

directories, telephone books and other sources.

Most consumers will see the first big change from deregulation in July, when

CL&P and UI send out new kinds of electric bills.

The bills are designed to help consumers understand the transition from the

old, regulated system to a new, free-market system that begins in the year

2000.

The law promises savings of at least 10 percent off the rates established in

1996. Because utilities have cut rates since 1996, the net effect is a rate

cut of about 5 percent for about 314,000 UI customers in the New Haven and

Bridgeport area and about 6 percent for about 1 million CL&P customers.

The mandated rate cut will be in effect until the end of 2002. After that,

electric rates will be decided by the free market.

New electric bills will list separately the cost for the actual electricity,

the cost to get it to people's homes and the cost for other expenses such as

conservation and education programs and nuclear decommissioning.

Another item on the bill will show the cost for paying off old debts that were

incurred under the regulated system. The DPUC is trying to decide how much

each of these costs will be.

A draft decision on the amount of old debts, called "stranded costs," is due

in mid-June, with a final decision planned for the end of June.

The stranded cost issue will have a major effect on rates under deregulation.

CL&P is to recover up to $4.3 billion in debts related to nuclear plants,

fossil fuel plants, power contracts and other costs. UI seeks about $900

million.

The utilities are required to sell off their power plants if they want to

collect stranded costs. UI in April sold its plants to Wisvest Corp. of

Wisconsin. CL&P must sell its fossil fuel plants by the end of the year and

must try to sell its nuclear plants by 2004.

The Office of Consumer Counsel and other advocates are fighting to keep

stranded costs to a minimum.

"The lower the stranded costs are, the lower bills are going to be and the

more competitors will want to come in, to the benefit of all consumers," said

Consumer Counsel Guy Mazza.