 Deregulation
- A National, State and Local Perspective
We recently attended a
national conference of the National Rural Electric Cooperative Association
(NRECA). This was a meeting expressly designed for directors of electric
cooperatives from across the country.
Although many issues confronting the electrical industry were
discussed, from generation to transmission and distribution, certainly a major
focus was the aspect of deregulation of the electrical industry being addressed
by most states and congress.
Electric utilities are, for the most part, state regulated
monopolies that are allowed certain geographic areas as exclusive service
areas. Deregulation, or "choice" as it is frequently referenced, would allow
utilities to sell to any customer and for consumers to pick their provider,
similar to choosing your long distance carrier. ("Haven't we been through this
before?")
At the federal level, strong lobbying efforts on both sides of
the deregulation issue is ongoing. In the Senate, a bi-partisan bill introduced
by Senator Bumpers, D-Arkansas, and Senator Gorton, R-Washington, would mandate
nationwide deregulation of the industry by January 1, 2002 (only four years
away). Large industrial customers and states with high power costs are lobbying
hard for deregulation. Those groups representing smaller business and
residential, plus those states with traditionally lower electrical costs are
much more reserved, hesitant, or even opposed to such nationally mandated
legislation.
States such as New York, New Hampshire and Rhode Island have some
of the costliest power rates across the country. Conversely, states like
Oregon, Washington, Idaho, and Kentucky enjoy some of the cheapest power.
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``One of the major fears facing
the Northwest over deregulation is that our relatively low rates
might disappear..."
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One of the major fears facing the Northwest over deregulation is
that our relatively low rates might disappear as our low-cost power is diverted
and sold elsewhere.
Enron Corporation, which recently acquired our local PGE, is a
strong supporter of a federal mandate for federal deregulation. They envision
within 5-10 years, a nationwide system of 10-15 generating companies, a similar
number of marketing companies, and a varied system of small companies offering
transmission and distribution.
Salem Electric's fear is that such a federal or state mandated
monopoly would eventually raise rates, and weaken our excellent record for
continuity and reliability of service.
Locally, the Oregon Rural Electric Cooperative Association
(ORECA) has formed a seventeen-member task force representing each of the
electric cooperatives across Oregon. The purpose is to closely examine all the
issues that will be confronting the 1999 Oregon legislature in regard to our
industry's possible restructuring and/or deregulation.
Our General Manager, Bob Speckman, is representing Salem Electric
on that statewide group. Most believe the Oregon Legislature will likely take
some action in 1999, which will alter the way we currently do business.
Our purpose is to hopefully come forth with a mutually acceptable
plan, so that we can approach the legislative body with a unified position
which will be in the best interest of you, our valued customers.
--Curt Culver, Director
 We
were most impressed by the knowledge and dedication of the panelists from NRECA
who represent America's largest electric cooperative utility network. 488 of us
were director delegates from throughout the United States, all pulling together
to maintain our quality and reliability of customer service, keeping rates
down, and meeting the needs of our members as we face the changes and
challenges that deregulation will bring.
Salem Electric is a unique cooperative. We are really not rural
in the real sense of the word. We, as members, are part of the business
community of downtown Salem, most of West Salem and a large portion of Keizer.
Our roots stem from the time when Salem was, indeed, a small community of
residential consumers, much like the smaller communities that were represented
by most of the delegates at our convention.
Salem Electric has served this area since 1941. Cooperatives in
the electrical industry have been around for 65 years, and they number over
1000 in our nation. Changes are coming. We were told at the convention to be
prepared to spend more money, to be willing to change, to be open-minded and
not fearful. Your board of directors does have a policy and a position
regarding deregulation. Our panelists at the convention stressed this priority.
Salem Electric's General Manager, staff and board are well
educated about the changing environment that is upon us. A quote we heard at
the convention: "Don't predict the future; create it!" Your board plans to do
just that.
--Alicia Bonesteele, Director
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