Oklahoma Attorney General Drew Edmondson has asked the stateSenate to postpone the July 2002 deadline for deregulatingOklahoma’s electricity market in light of power market problems andhigh prices in deregulated states such as California, New York andMontana.
Edmondson’s letter Nov. 8 was addressed to state Sen. KevinEasley, sponsor of legislation that would implement an earliermandate.
“Oklahoma currently has low cost power for its citizens andabsolutely no competition in the retail market,” stated Edmondson.”Additionally, there is no federal legislation pending that wouldpreempt the state if we fail to act. So, there is no emergencynature to resolving this dilemma.
“I propose that the legislature repeal the artificially set July1, 2002 deadline and support an in-depth study of not only theconsiderations of all interested parties in our state, but also theexperience of other states, in arriving at a comprehensive programof restructuring.”
Andrea Chancellor, a spokeswoman for Public Service Company ofOklahoma, which supplies electricity to 480,000 Oklahoma consumers,disagreed with the attorney general’s proposed delay. “If we don’tderegulate, certainly the attractiveness of Oklahoma is going to beless. We have 14 power plants that have been announced, or havestarted to [be built] in Oklahoma. They have come based on thepromise of a deregulated environment. A delay could be of someconcern and we want to make sure that we are careful on making adecision on the timing.”
The deadline for electric restructuring was imposed initially bythe Electric Restructuring Act of 1997, which requires separationof power generation facilities from utilities’ main lines ofbusiness, after which they would be permitted to compete forcustomers.
Implementing restructuring legislation failed to emerge from thelegislature in 2000, but Senate Bill 220 which passed, appeared tobe the best compromise at the time, Edmondson said. Since then,Edmondson has reversed his opinion on SB 220, due to recenttroubles with electric restructuring in other states.
“Despite the problems that other states are having, Oklahoma’sapproach is very different,” Chancellor said. “We were at a verydifferent starting gate when this race began than where Californiawas when it began. Today we produce more power than we consume andwith the added capacity that is coming online, we feel prettyconfident that we will have adequate supplies. [California] had notbuilt a power plant in at least a decade, and the infrastructurethat they put into place in California really tied the hands of theindustry and made it very difficult to have an open market.”
Edmondson said in his letter, “This issue is too important tothe consumers of this state to promote another last minutesolution,” he said.
Earlier in the year it appeared as if SB 220 would bereintroduced when the legislature reconvenes in February 2001, butsources said sponsor Easley now has concerns of his own and isreluctant to move forward until discussions can be held withaffected groups.
Edmondson said, “In any event, the July 1, 2002 date should beremoved to alleviate the pressure to enact a bill before the stateis truly ready. There is no benefit derived by our citizens if wemake a hasty decision which will, in all likelihood, have to beamended significantly.”
“I feel very strongly that, with an economic impact study andthis additional time, a plan can be accomplished which will allowcompetition to flourish while protecting Oklahoma citizens,” theattorney general concluded.
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