Commentary: Deregulation of electric service getting new look

Journal Record, The (Oklahoma City), Nov 12, 2007 by William O Pitts

Deregulation of electric service in Oklahoma, which proponents claimed to be inevitable 10 years ago, is again on the state Legislature's radar screen. The difference is there is no rush to judgment today that existed in 1997 when the Legislature was being pressured by a few ambitious legislators to follow California's lead into an industry restructuring that turned out to be a calamitous and costly experiment for its electricity consumers.

Armed with that experience and those of other states, cooler legislative heads appear more intent on considering needed changes in some existing provisions of the Electric Restructuring Act of 1997, which provided a transitional road map for restructuring but did not set the process in motion.

Today there is no imminent threat of Congress enacting a federal law, as there was 10 years ago.

A new Joint Electric Utility Restructuring Task Force created by Senate Bill 734 last session recently began its work some five years after the last major legislation on the subject failed in the House of Representatives on the last day of the 2002 legislative session.

Familiar participants were present at the first meeting, a number of whom were engaged in the initial effort for deregulation, but for the most part those legislators involved today were not around in 1996.

The makeup of the task force is different from those that worked on the law for six years, and its legislative leadership is totally new with hopefully different perspectives on the issue. None of the participants indicated any exigency for new deregulation legislation but suggested possible changes in the 1997 law.

Neither did members of the task force (members of the House and Senate energy committees and chairman of the Oklahoma Corporation Commission), a number of whom were not present indicate great interest in a major effort to write a new restructuring law.

State Sen. Jay Paul Gumm, D-Durant, presided as one of the joint task force chairs. Sharing that position with him are state Sen. Brian Bingman, R-Sapulpa, co-chair of the Senate Energy Committee, and Adkins, who chairs the House Energy and Technology Committee.

Lasting about two hours, the task force meeting was devoid of questions for the various speakers representing investor-owned utilities, electric cooperatives, and electric power providers and municipally operated utilities.

Gone were the sparks of controversy that marked most of the meetings of earlier task forces where there clearly were divisive issues. Gone was the partisan bickering by then Sen. Kevin Easley, D- Tulsa, who chaired those task forces and feuded with members of the Republican-controlled Corporation Commission. That led to including a moratorium on commission rulemaking on restructuring matters during the transition to deregulation without prior and express consent of the Legislature.

Several industry spokesmen pointed out the need for removing that provision and there seemed to be a general consensus for doing it.

Paul Renfrow, manager of government affairs for OG&E, told the members there is no need for this moratorium on commission rule making. He also indicated there is some unfinished business with the 1997 law and some things need to be looked at including electricity transmission. He said there is no urgency in acting on the present law, adding his company is again opposed to deregulation as it was in 1996.

Future meetings will be at the call of the chairs. It was a smooth beginning for the task force, which will remain in existence until Dec. 1, 2009, unless terminated earlier by a majority vote of the members.

There are a number of issues important to electric service industry which the authorizing legislation directed the task force to study. They will merit the attention of providers, transmitters and consumers alike.

Times and circumstances change giving new perspectives to important issues that may rise or fall in their urgency. For now there is no public demand for electric restructuring. In fact there may well be general antipathy fed by doubt about the entire concept and its consequences.

William O. Pitts may be reached by phone at (405) 278-2880 or by e-mailing bill.pitts@journalrecord.com.