ON HOLD: N.C. cautious on power deregulation

THE ASSOCIATED PRESS

HIGH POINT

The controversy over higher electric rates in California this summer in the wake of electric deregulation could influence the debate on the issue in North Carolina.

California consumers are rebelling against rapidly increasing electricity rates during a sweltering summer in the West. The state's utility regulators are hearing complaints from consumers whose bills have doubled and even tripled.

The complaints are reaching the ears of North Carolina legislators responsible for sorting out the possible deregulation of power sales.

Members of the Study Commission on the Future of Electric Service want to see how deregulation has affected rates and service in other states where it's being phased in, said state Sen. David Hoyle, D-Gaston, the commission's co-chairman.

''We're going to be very, very careful,'' Hoyle said.

About 25 states have either instituted or are in the process of implementing some form of electric deregulation. The study commission, which will resume meeting Sept. 14 after taking a break during the 2000 legislative session, will get an update on the situation in California, Hoyle said.

In April, the commission approved recommendations that include deregulating the sale of electricity statewide in 2006 and letting some customers begin choosing their electricity provider as early as 2005.

The commission hasn't crafted specific legislation for the General Assembly, which will have the final say on the matter.

Rep. Mary Jarrell, D-Guilford, another commission member, said that North Carolina officials should learn from the troubles in California. ''This may make the commission even more mindful of keeping the cost of electrical service as low as possible,'' she said.

What's happened in California ''will be uppermost in the minds of members of the commission,'' she said.

The study commission hasn't come up with a specific plan to deal with the $5.5 billion in municipal power debt that is slowing plans to deregulate the power industry. Fifty-one North Carolina cities and towns took on the debt to help finance nuclear power plants built by the parent companies of Duke Power and Carolina Power & Light.

''The events in California are going to cause the public and the legislature to go a little slower and consider the ramifications of deregulation,'' said Mike Rulison of Raleigh, the president of the North Carolina Consumers Council.

The Wall Street Journal reported that there's growing evidence that some power companies are finding ways to exploit the change from heavy regulation to open competition at the expense of consumers.

The tactics include manipulating wholesale electricity auctions, taking juice from transmission systems when suppliers aren't supposed to and denying weaker competitors access to transmission lines.

Joseph Maher, a spokesman for Duke Energy Corp., said he is confident about the study commission's approach to deregulation.

Published: August 6, 2000

http://www.journalnow.com/news/local/local/northcarolina/power06.htm

-- Martin Thompson (mthom1927@aol.com), August 06, 2000