Merits of electricity deregulation debated

Friday, January 4th 2002, 12:00 am
By: News On 6

OKLAHOMA CITY (AP) _ The chairman of Oklahoma's Corporation Commission accused members of a state government task force of trying to hide the possibility of rate increases if the state's electric utility industry is deregulated.

Denise Bode on Thursday urged members of the Electric Restructuring Advisory Committee to include information in its interim report from a study by the Oak Ridge National Laboratory that predicts consumers could pay between 5 percent to 25 percent more under deregulation.

Bode said it is important to include the information because Oklahoma needs to consider the impact of new generation facilities and the cost of those facilities to rate payers.

``It's the only portion of the analysis that outlines the impact,'' she said. ``I don't understand why you're trying to hide the ball on this.''

Sen. Kevin Easley, chairman of the task force, said Bode was playing politics. Easley, D-Broken Arrow, also said he did not have confidence in the $150,000 study, which was authorized by the Corporation Commission.

``We are working very hard to get a consensus on this report,'' he said. ``We've got 120 changes from the attorney general and the Corporation Commission, and now one is controversial ... on a report (the Oak Ridge study) that I believe is fatally flawed.''

The Oak Ridge study predicted that to avoid losing money new power plants would have to raise prices without losing market share.

As a result, the average prices to consumers could be 5 percent to 25 percent higher than regulated rates, the study said.

It also predicted if all the proposed 20-plus plants were built, then there would be excess capacity that would not be sustainable in a restructured market and would create the potential for highly volatile prices.

Edmondson said the Oak Ridge study went beyond the scope of the task force's mission.

``We were charged with producing an interim report on transmission,'' he said. ``It may be appropriate to include the Oak Ridge study in the final report, not on an interim report.''

The task force, which has been meeting since August, is scheduled to make a final report to the Legislature in December.

Based on the impact of deregulation on California consumers last year, the Legislature has postponed until 2003 the debate on how the retailing of electricity will be carried out.

The Oak Ridge report concluded that transmission facilities in Oklahoma will likely require expansion and upgrades, but the uncertainty of the future of electric transmission expansion, operation and regulation makes it difficult to pinpoint solutions.

It also stressed the importance of determining who will manage and control the planning, upgrading and operating of transmissions systems in Oklahoma.