FTC Probes Retail Power Deregulation Plans
At the request of Reps. W.J. "Billy" Tauzin (R-LA) and Joe
Barton (R-TX), the Federal Trade Commission (FTC) last week said it
would look into "possible jurisdictional limitations" on states'
authority to design successful retail competition plans, and
whether additional federal legislative or regulatory action is
While retail competition should provide customers with lower
prices, a higher quality and greater variety of products/services
and more innovation, this "may not develop instantaneously...after
decades of pervasive regulation and local franchised monopolies,"
the agency said. "Moreover, the effectiveness of competition may be
affected greatly by the rules that govern the operation of the
market and that provide incentives to guide market participants'
The agency wants to know what's working in the states, what's
not working and what needs to be fixed. It plans to issue a report
that will discuss the advantages and disadvantages associated with
different approaches to specific electric restructuring issues, as
well as identify what additional federal legislative or regulatory
actions may be needed.
The lawmakers requested the FTC review largely in response to
the problems stemming from the deregulation of the California power
markets, which has prompted several states to either delay or
threaten to delay deregulation of their retail markets. The states
include Nevada, Montana, West Virginia and Arkansas. Four other
states --- Louisiana, Colorado, Alabama and Mississippi --- have
decided that restructuring is not in the public interest.
Per the request of Barton and Tauzin, the FTC said it would
update its July 2000 staff report, entitled "Competition and
Consumer Perspectives on Electric Power Regulatory Reform." For the
report, it is asking states to respond to a series of questions
addressing the benefits and drawbacks of their retail power
It poses a total of 37 questions that cover six categories ---
history and overview of retail electricity program, consumer
protection, retail supply, retail pricing, market structure and
other issues. The questions can be found on the agency's web site
The agency said it would examine state plans that allow
customers to choose their generation supplier, and those with
unique approaches to retail competition. The states may include,
but aren't limited to, Arizona, California, Illinois, Maine,
Maryland, Massachusetts, Michigan, New Jersey, New York, Ohio,
Pennsylvania and Texas, the FTC said. It noted it would work with
individual states to understand the various features of their
plans, and to collect information relevant to understanding the
market reaction to a particular state's plan.
Comments are due at the FTC on April 3. Written comments should
be submitted in both hard copy and in electronic form. Six hard
copies of each submission should be addressed to Donald S. Clark,
Office of the Secretary, FTC, 600 Pennsylvania Ave. NW, Washington
D.C. 20580. The submissions should be captioned "V010003 - Comments
Regarding Retail Electricity Competition." Electronic submissions
may be sent to firstname.lastname@example.org.
For further information, contact Michael Wroblewski at (202)
326-2155 or at email@example.com, or John Hilke at (303) 844-3565
or at firstname.lastname@example.org.