Energy crisis prompts deregulation concern

By DON McINTOSH, Staff Reporter

SALEM - As each day the public hears more about the unfolding energy crisis caused by California's energy deregulation law, sentiment is growing to jettison or at least delay the beginning of deregulation in Oregon.

Portland Mayor Vera Katz and Bill Miller, business manager of Portland-based Electrical Workers Local 125, are among those calling for delaying the onset of deregulation in Oregon, which is scheduled for Oct. 1.

The Oregon AFL-CIO is looking into the issue, with some affiliates favoring delay, and some supportive of the deregulation.

Under Senate Bill 1149, passed by the 1999 Oregon Legislature, large industrial customers will be allowed to leave their local utilities and purchase electricity from other producers. Among those playing a role in the negotiations on that bill were members of the Oregon State Building and Construction Trades Council.

In mid-January, Miller wrote a letter to Oregon Governor John Kitzhaber urging him to empower the Oregon Public Utility Commission to delay the implementation of Oregon's deregulation until at least Oct. 1, 2004.

"Oregon's deregulation is quite different than California's in that it doesn't force utilities to sell off their generating capacity," said Marc Anderson, a former manager at Pacificorp hired by Miller four months ago as a government affairs manager for Local 125.

"Still, we're concerned, because of the current state of the power market, about throwing risk or uncertainty into the equation when we don't need to," he said.

Several factors make such a delay a good idea, Anderson said. In three years, more generators may have come on line, helping correct the supply and demand imbalance that is currently a factor in skyrocketing wholesale electricity rates.

"We're also concerned at the meter. Everybody is an electricity consumer, including union members," Anderson said. Some critics of the new law predict that prices for residential and small business users will rise as utilities lose large customers to outside competition. Several Oregon utilities have already asked for rate increases justified by loss in revenue when deregulation begins.

Accordingly, Anderson said, unions are finding unusual allies in their concern about deregulation, including the Building Owners and Management Association.

Meanwhile, some environmentalists and advocates for low-income people are eager to see the new law take effect - the former because at a later stage in implementation, residential customers will be given options to support "green power" by paying a premium to purchase alternative energy sources; the latter because the law establishes a 3 percent kicker for programs to help low-income people weatherize their homes and pay their bills, triple the amount of funds now available.

Oregon is not the only state where people are taking a second look at deregulation because of the California experience. The Wall Street Journal reports that at least a dozen states are now considering delaying or altering previous deregulation plans. Twenty-four states have adopted some form of deregulation, but only a handful of these have opened markets to retail competition.

February 2, 2001 issue

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