Oregon lawmakers tinker with electricity deregulation delay

SALEM - In February, Public Utility Commission Chairman Ron Eachus was telling the news media that Oregon's electricity deregulation law, scheduled to take effect Oct. 1, could not be stopped politically.

Four months later, Eachus is out of a job, and there's almost no chance that Oregon's electricity deregulation will begin as scheduled. Still, the terms of the delay have yet to be worked out as the Oregon Legislature neared the final weeks of its 2001 session, even after months of debate and maneuvering in which Republicans piled on Democrats to devise bills blocking the law from taking effect.

"There seems to be a lot of fear that if something's not done, the voters are going to have retribution," said Marc Anderson, political director for Electrical Workers (IBEW) Local 125. Anderson, along with the Oregon AFL-CIO and several business groups, has been lobbying for a delay.

For deregulation opponents like Anderson and allies such as State Senator Tony Corcoran, D-Cottage Grove, and State Representative Robert Ackerman, D-Eugene, the point of delay was to give the Legislature another chance to kill the law. Accordingly, they and their bills favored delays of two to three years.

In contrast, for deregulation supporters like Senate President Gene Derfler, R-Salem, delay would be a way to avoid a public association between deregulation and the expected electricity price increases that will occur when Bonneville Power Administration begins its next five-year contract to provide most of the Northwest's electricity.

Term limits make this Derfler's last legislative session, meaning he may be more insulated than others from public pressure.

Oregon's deregulation law, known as Senate Bill 1149, was passed by the 1999 Legislature. It would enable large industrial customers in areas served by Portland General Electric (PGE) and Pacificorp to purchase electricity from other producers.

In mid-2000, however, wholesale electricity prices skyrocketed. The very same customers that might have been expected to endorse deregulation are now nervous about being exposed to the market, and desirous of stability. And the public-at-large views deregulation in overwhelmingly negative terms. Corcoran said he's gotten more calls from constituents about this issue than any other in the four legislative sessions he has served.

To overcome opposition from defenders of the deregulation law, Anderson said opponents of deregulation took a shotgun approach - they introduced bills into a number of committees in both houses of the Legislature.

At least 13 separate bills were introduced to either delay or repeal deregulation, differing in details such as how long they would delay it. Corcoran introduced two bills that would repeal it outright.

In mid-April, when deregulation opponents saw that Corcoran's bills would be given no hearing whatsoever, they organized their own "mock hearing," at which Oregon Congressman Peter DeFazio and others testified.

The one bill to make it was House Bill 3633, sponsored by Representative Betsy Close, R-Albany, at the request of the Albany Chamber of Commerce. The bill started out as a two-year delay, but was amended to 18 months, which would give the 2003 Legislature three months to kill or delay it further. Oregon's Legislature meets in odd-numbered years.

The bill passed 49 to 10 May 24, and as of press time, had been sent to the Senate Public Affairs Committee.

But Tim Nesbitt, president of the Oregon AFL-CIO, doesn't think the bill will go before the full Senate unchanged. Derfler, one of the staunchest supporters of the deregulation, reportedly favors a shorter delay, such as five months. Both the Democratic and Republican caucuses are divided on the issue. Some Democrats favor the deregulation law because it contains provisions that appeal to environmentalists and advocates for low-income people: 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, and the law establishes a 3 percent surcharge on utility bills for pay for programs to help low-income people weatherize their homes.

Corcoran said the situation is by no means a lost cause for deregulation opponents. "When we came into this building, we were told this would not even be discussed," Corcoran said. "Today, I believe a majority of my colleagues want a delay."

Democratic Governor John Kitzhaber's position is unknown, but Anderson said he told the IBEW last spring that he would sign a delay, and hoped to see a three-year delay bill passed.