For both regulators and legislators, California is awash in”unfinished business” in terms of getting its pioneering electricpower restructuring effort to result in robust competition, lowerprices and more significant choices for mass retail consumers,according to a variety of speakers at a two-day conferenceexamining the state’s 18-month-old experiment.

Unresolved market power issues and a question of the state’sultimate “political will” make the experiment so far inconclusiveat best, leaving a lot thorny issues to work through. Few of themore than two dozen speakers addressing the theme of “Surviving theTransition” in energy restructuring last week were optimistic thatthe outcome would provide the lower costs and more choices forconsumers, which were the prime goals of regulators and legislatorsthree years ago when the state’s 1996 electricity reform law waspassed.

“Clearly competition is not flourishing,” said Richard Bilas,president of the California Public Utilities Commission, adding hewas not speaking for the CPUC’s four other commissioners. “Ipersonally will not be satisfied until there is significant retailcompetition in the energy industry in California.”

Bilas told an industry audience that he views California’selectricity restructuring as a “huge experiment” with a nationalspotlight on it. However, whether it will fulfill its promise afterthe ongoing “transition period” for paying off utility strandedcosts and unfreezing rates “remains to be seen.”

Among the unresolved issues, Bilas — along with several otherspeakers — put market power at the top of the list, saying he”detests” price caps but thinks they are needed until the marketpower issue is resolved. “It is particularly critical during thesummer peaks and particularly to must-run contracts. There isserious concern about market power.”

Among the most complex issues that speakers addressed as part ofCalifornia’s unfinished business is the treatment of the wiresbusiness – both transmission and distribution. The need to examinewhether the utilities should continue to own transmission longerterm was raised by a trading representative, Gary Ackerman,executive director of the Western Power Trading Forum. Others notedthat distributed generation and other distribution competitionissues need to be addressed next year.

The CPUC faces about a half-dozen major issues on electricrestructuring, including evaluations of large assets such ashydro-electric systems and transmission, the longer term electricrates following the transition, utilities’ long-term role inprocurement, and demand-side programs such as real-time metering.Michelle Cook, an advisor to CPUC commissioner Henry Duque, said ifthe utilities’ role in procurement is resolved there may not be aneed to open distribution to competition, and real-time metering isone of the prime means to help create more widespread competitionamong residential and small business customers. “We had a workshopon distributed generation, and I think one of the messages thatcame out of that proceeding was: ‘meters, meters, meters’,” Bilassaid. “I think meters are important. The question is how do youdeploy them and what else has to be done.

When asked specifically, Bilas said he thought resolving theremaining issues in California will take collaboration between theCPUC and the state legislature, and he said the relationshipbetween the appointed and elected officials is “much improved.”

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