Oklahoma’s Republican Sen. Don Nickles has introduced a wholenew approach to the electric restructuring debate, proposing a billthat would strip states of their authority to grant franchises toutilities and open local markets to competition.

The bill, the Electric Consumer Choice Act, would eliminateelectric monopolies and prohibit undue discrimination againstconsumers purchasing electricity in interstate commerce. It alsowould provide for access to local distribution facilities and allowa state to impose reciprocity requirements on out-of-stateutilities seeking to enter in-state markets.

The Nickles bill is based on the premise that the electricenergy market is either in or affects interstate commerce,therefore state constraints violate the Commerce Clause of theConstitution. It would amend the Federal Power Act to eliminate theprotection provided for state regulation that establishes,maintains, or enforces an exclusive right to sell electric energyor that unduly discriminates against any consumer who seeks topurchase electric energy in interstate commerce.

Proponents of eliminating local franchises claim it is the leastintrusive way of accomplishing restructuring. Rather than imposinga new ISO bureaucracy, it would simply allow others such asindependent power producers and microgenerators to compete. ClydeW. Crews of The Competitive Institute in Washington told aGasMart/Power audience earlier this year that IPPs and industrialusers would have a profit incentive to cooperate with otherindustries such as cable and telephone which are making newconnections with homes and businesses.

Changes going forward in these industries provide a “window ofopportunity” for new means of electric power generation anddistribution. In addition, just the threat of competition fromthird-party power delivery or distributed power would forceutilities to lower prices and offer better service.

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