At the request of Reps. W.J. “Billy” Tauzin (R-LA) and JoeBarton (R-TX), the Federal Trade Commission (FTC) last week said itwould look into “possible jurisdictional limitations” on states’authority to design successful retail competition plans, andwhether additional federal legislative or regulatory action isrequired.

While retail competition should provide customers with lowerprices, a higher quality and greater variety of products/servicesand more innovation, this “may not develop instantaneously…afterdecades of pervasive regulation and local franchised monopolies,”the agency said. “Moreover, the effectiveness of competition may beaffected greatly by the rules that govern the operation of themarket and that provide incentives to guide market participants’behavior.”

The agency wants to know what’s working in the states, what’snot working and what needs to be fixed. It plans to issue a reportthat will discuss the advantages and disadvantages associated withdifferent approaches to specific electric restructuring issues, aswell as identify what additional federal legislative or regulatoryactions may be needed.

The lawmakers requested the FTC review largely in response tothe problems stemming from the deregulation of the California powermarkets, which has prompted several states to either delay orthreaten to delay deregulation of their retail markets. The statesinclude Nevada, Montana, West Virginia and Arkansas. Four otherstates — Louisiana, Colorado, Alabama and Mississippi — havedecided that restructuring is not in the public interest.

Per the request of Barton and Tauzin, the FTC said it wouldupdate its July 2000 staff report, entitled “Competition andConsumer Perspectives on Electric Power Regulatory Reform.” For thereport, it is asking states to respond to a series of questionsaddressing the benefits and drawbacks of their retail powercompetition programs.

It poses a total of 37 questions that cover six categories —history and overview of retail electricity program, consumerprotection, retail supply, retail pricing, market structure andother issues. The questions can be found on the agency’s web siteat

The agency said it would examine state plans that allowcustomers to choose their generation supplier, and those withunique 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 withindividual states to understand the various features of theirplans, and to collect information relevant to understanding themarket reaction to a particular state’s plan.

Comments are due at the FTC on April 3. Written comments shouldbe submitted in both hard copy and in electronic form. Six hardcopies of each submission should be addressed to Donald S. Clark,Office of the Secretary, FTC, 600 Pennsylvania Ave. NW, WashingtonD.C. 20580. The submissions should be captioned “V010003 – CommentsRegarding Retail Electricity Competition.” Electronic submissionsmay be sent to

For further information, contact Michael Wroblewski at (202)326-2155 or at, or John Hilke at (303) 844-3565or at

Susan Parker

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