Oklahoma's Nickles Would Scrap Utility Franchises
Oklahoma's Republican Sen. Don Nickles has introduced a whole
new approach to the electric restructuring debate, proposing a bill
that would strip states of their authority to grant franchises to
utilities and open local markets to competition.
The bill, the Electric Consumer Choice Act, would eliminate
electric monopolies and prohibit undue discrimination against
consumers purchasing electricity in interstate commerce. It also
would provide for access to local distribution facilities and allow
a state to impose reciprocity requirements on out-of-state
utilities seeking to enter in-state markets.
The Nickles bill is based on the premise that the electric
energy market is either in or affects interstate commerce,
therefore state constraints violate the Commerce Clause of the
Constitution. It would amend the Federal Power Act to eliminate the
protection provided for state regulation that establishes,
maintains, or enforces an exclusive right to sell electric energy
or that unduly discriminates against any consumer who seeks to
purchase electric energy in interstate commerce.
Proponents of eliminating local franchises claim it is the least
intrusive way of accomplishing restructuring. Rather than imposing
a new ISO bureaucracy, it would simply allow others such as
independent power producers and microgenerators to compete. Clyde
W. Crews of The Competitive Institute in Washington told a
GasMart/Power audience earlier this year that IPPs and industrial
users would have a profit incentive to cooperate with other
industries such as cable and telephone which are making new
connections with homes and businesses.
Changes going forward in these industries provide a "window of
opportunity" for new means of electric power generation and
distribution. In addition, just the threat of competition from
third-party power delivery or distributed power would force
utilities to lower prices and offer better service.
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