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Here is a map of Deregulated States and states that has put 
deregulation on hold because of poorly written legislation

 

 

            

                                               

 

 

 

 

 

 

 

 

 

 

If deregulation is set up properly by each states legislators, it can be a very positive opportunity for the consumer.  Some states however have failed to put safety nets in place for the consumer.  For that reason, PowerPartners has elected not to do business directly in those states.  Where a corporate home office is located in a region that has passed good legislation to protect the consumers and has outlets in states with poorly written legislation where PowerPartners has elected not to do business.  PowerPartners will help the corporate office to switch the electric accounts of their subsidiaries located in deregulated areas even when we do not actively solicit commercial accounts in that area. 

The following article tells you why PowerPartners has elected not to work specific markets.  In states where deregulation was not set up properly, PowerPartners  feels it is to our advantage to only solicit business in states where deregulation is working to the consumers good.  In those states that have good deregulation legislation, the consumer has an opportunity to save a lot of my by choosing a new electric provider.  

The following article can be viewed at the following URL.
http://www.opensecrets.org/news/electricity.htm

Electricity Deregulation
WHAT’S THE ISSUE? 

The U.S. electric industry is undergoing a sea change in the way it delivers electricity to millions of households and businesses nationwide. The $220 billion industry, which has been called the last great government-sanctioned monopoly, is slowly but surely being deregulated and opened to competition, giving consumers the power to choose their electricity provider in much the same way they choose telephone carriers.

 Advocates of deregulation say reducing government control of the industry will benefit consumers – lowering prices while expanding services and giving the public a say in who supplies the power that runs their computers, toasters, lamps, and more. But among the 24 states that have enacted electricity deregulation plans, results are mixed. Rising prices, skyrocketing demand, and limited supply in some areas have raised questions about the viability of deregulation. At the same time, Congress has been unable to agree on a measure to introduce competition to the electricity market. 

 
HOW IT MAY AFFECT YOU
 

Whether or not electricity deregulation delivers the benefits touted by its supporters – including lower prices and more services – is an open question. Pennsylvania’s deregulation experiment, enacted in 1998, has been a rousing success by most accounts. Nearly 500,000 consumers – more than 11 percent of ratepayers – had chosen to leave their utility company as of Oct. 1999, reports The Washington Post. In the Philadelphia area, residential customers who chose the least-expensive electricity supplier were saving about $10 per month.

The story is much different in California, which in 1996 became one of the first states to enact an electricity restructuring plan. Not long after the plan went into effect, price increases began to whittle away public support for deregulation in the Golden State. Just two years after deregulation was enacted, California consumer groups succeeded in putting on the ballot an initiative that would have thrown out the state’s deregulation plan. The measure failed. Criticism of deregulation intensified in the summer of 2000, when limited power supplies and increasing demand caused the wholesale price of power to soar throughout the state. In San Diego, where the retail price of power fluctuates directly with the wholesale market, electric bills doubled. The problem grew markedly worse in the winter of 2000/01, as the state's electric utilities faced a financial crisis and consumers were met with electricity shortages and skyrocketing prices.

 
HOW THE INTEREST GROUPS SEE IT
 

Virtually everyone involved with the issue seems to agree that electricity deregulation can work. The major question is how. The drive for electricity deregulation is being led by seven groups, each of which advocates changes to the current system that provide the greatest benefit to their members, reports Congressional Quarterly. The groups have spent a combined $50 million lobbying lawmakers, according to their own reports to Congress, which are believed to contain extremely conservative figures.

The groups vary in their approach to deregulation. The first point of contention is whether Congress should repeal the 1935 Public Utility Holding Company Act (PUHCA), which gave big utilities a monopoly in their geographic area but prevented them from expanding their reach. The law was enacted to prevent national conglomerates from dominating the electricity industry, and some groups -- namely large investor-owned power companies -- contend that the law now stands in the way of increased competition that could lower prices and improve services. Other groups, including utilities owned by government agencies and municipalities, are concerned that repealing PUHCA would do away with important consumer protections.

There are other ways the groups vary in their approach to deregulation. Some groups want to make sure they aren’t squashed by the large investor-owned electric companies in a deregulated system. The American Public Power Association, which represents utilities owned by municipalities or other government agencies, wants the ability to compete fairly with the large investor-owned electric companies. It also favors government monitoring of the electric market to ensure fair pricing and access.

Other groups want deregulation to come free of additional government oversight that would favor rural, independent, and government-owned utilities. Edison Electric Institute, the giant trade association of investor-owned electric companies and utility holding companies, opposes additional federal regulations on investor-owned electric companies that would curb the market power of those companies. It supports giving consumers a choice of electricity providers – including their present providers.

A third category of groups is concerned about deregulation’s overall effects on small electricity providers and consumers. The National Rural Electric Cooperative Association, a national service organization that represents consumer-owned cooperative electric utilities, is worried that electricity deregulation could have a negative impact on residential customers, small businesses, farmers and ranchers. It wants Congress to give regulatory authority to states, and to allow electricity cooperatives to regulate themselves.

HOW IT ALL BEGAN
 

The origins of the current system of energy production and delivery date back to the New Deal era, when Congress brought an end to the tight reign of large interstate holding companies that controlled more than 75 percent of the country’s electric generating capacity. The Public Utility Holding Company Act of 1935 (PUHCA) forced the holding companies to break up, and gave utilities a government-sanctioned monopoly over a limited territory. In exchange, utilities agreed to provide reliable electric service to all customers at a regulated rate. The law resulted in the formation of nearly 300 power systems and 800 rural cooperatives, reports Congressional Quarterly.

OPEC’s worldwide oil embargo in 1973 had a dramatic impact on the electric industry. Although the embargo was most famous for creating interminable lines at the gas pump, it also produced sharp increases in electric utilities’ costs. The result was a surge of interest in alternative forms of energy. In 1978, Congress passed the Public Utility Regulatory Policies Act (PURPA) requiring utilities to use "renewable" energy, which is produced from wind, solar, and other sources. Both PUHCA and PURPA would later be viewed as impediments to workable national electricity deregulation.

By the 1990s, a growing chorus of voices within the electricity industry, Congress, and the federal government was pushing to bring competition to the industry. Congress opened the system to competition in 1992 with the National Energy Policy Act, which allowed power producers to compete for the sale of electricity to utilities. In 1996, the Federal Energy Regulatory Commission (FERC) issued what would become one of its most famous orders. Order 888 required utilities to open their transmission lines to competitors. Soon thereafter, New Hampshire launched a pilot program allowing competition, as did Arizona, California, Massachusetts, Pennsylvania, and Rhode Island. These actions at the state level fueled the fire for a national deregulation plan.

 
THE MONEY
 

As talk of national electricity deregulation intensified in the 1990s, electric utilities -- not surprisingly -- increased their political contributions to candidates and parties. In 1992, utilities contributed a total of $5.4 million in individual, PAC, and soft money contributions. That figure nearly doubled to $9.5 million in 1996. That figure could double again when the final statistics for the 2000 election cycle are known.

The strongest area of growth in political giving from electric utilities has been in the form of soft money. In 1992, utilities contributed just $556,000 in unlimited, unregulated soft money to the Democratic and Republican parties. By 1996, soft money contributions increased by more than six times to $3.6 million. The industry's soft money contributions more than doubled in the 2000 election cycle to approximately $8 million.

It seems that every major group within the electric industry is pouring money into political activities. In fact, there’s so much money being thrown around that some observers say Congress has little incentive to resolve the matter quickly. Lobbyists, too, are reaping the benefits of the issue. One lobbyist even called it the "two-Lexus bill," reports C Q Weekly.

The undisputed lobbying leader in this issue is the Edison Electric Institute, which has spent tens of millions of dollars lobbying Congress on behalf of large investor-owned electric companies. Other types of electric companies are also in the game. Rural electric cooperatives are led by the National Rural Electric Cooperative Association, which is consistently among the industry’s top 10 contributors to candidates and parties. Municipal and government utilities, represented by the American Public Power Association, are also active in lobbying elected officials, albeit to a much lesser degree than the wealthy investor-owned utilities.

And then there are the advertisers. As any Congressional staffer or lobbyist knows, publications aimed at Congress have been filled with ads from companies and groups staking out positions on the debate over electricity deregulation. These groups include Americans for Affordable Electricity, a coalition of large-scale business consumers of electricity; Citizens for State Power, a conservative coalition backed by investor-owned electric utilities; and the Electric Utility Shareholders’ Alliance, a coalition of cooperatives, investor-owned utilities and labor interests.

 
THE PARTY LINE
 

As late as 1994, electric utilities slightly favored Democrats over Republicans with their campaign contributions. But like many industries, electric utilities dramatically increased their preference for Republican candidates and committees following the GOP takeover of Congress in 1994. Between the 1994 and 1996 election cycles, the proportion of contributions from electric utilities going to Democrats dropped by nearly half, from 53 percent to 32 percent. During the same period, the proportion of contributions to Republicans leapt from 47 percent to 68 percent. Electric utilities continue to favor Republicans with their campaign contributions by more than 2 to 1.

 
THE ISSUE IN CONGRESS
 

Electricity deregulation has been the focus of pointed debate in Congress as far back as 1996, but the absence of consensus – among members of Congress and the various groups lobbying them – has resulted in little progress.

The debate during 1999 and 2000 focused on whether the federal government or the states should be responsible for overseeing a deregulated system. Those who supported giving the FERC authority included Rep. Thomas Bliley (R-Va.), the retiring chairman of the House Commerce Committee, and Sen. Jeff Bingaman (D-N.M), ranking member on the Senate Energy and Natural Resources Committee. Favoring state control were Rep. Joe Barton (R-Texas), chairman of the House Commerce Energy and Power Subcommittee, and Sen. Frank Murkowski (R-Alaska), who heads the Senate Energy and Natural Resources Committee.

Bliley and Murkowski each put forth deregulation proposals in the 106th Congress, but neither man got very far. In the House, Barton’s subcommittee approved a bill in Oct. 1999 that would grant states most of the power to oversee a deregulated system. The vote was 17-11. Bliley, wary of giving the states that much power, called the full committee together in the summer of 2000 to consider his bill, but adjourned the session without so much as a vote.

Murkowski tried unsuccessfully to move his deregulation proposal through the Senate Energy and Natural Resources Committee. Instead, the panel approved a more limited measure that seeks to guarantee reliability of the nation’s power grid. The Senate passed the bill June 30, but the House did not act on it before the 106th Congress adjourned.

The prospects for passage of national electricity deregulation in the 107th Congress are unclear. The fallout from California's failed deregulation experiment could dim the level of enthusiasm among deregulation proponents in Congress. Another question mark is how the issue will fare in the retooled House Energy and Commerce Committee. Rep. W.J. "Billy" Tauzin (R-La.), the committee's new chairman, has not taken a leading role in the deregulation issue thus far. But the electricity industry is very familiar with him -- Tauzin is one of the top 10 House recipients of money from electric utilities.

PowerPartners  is publishing the the following article because regardless of the reason, the price of energy is increasing at an alarming rate.  To protect themselves, the consumer needs to aggressively find a provider willing to sell them power at a lower kWh rate and can be viewed at the following URL but it hasn't worked that way in all markets.  In markets where poorly written legislation was passed consumers are paying higher prices.  PowerPartners has chosen not to do business in those particular areas until good legislation is passed that will protect the consumer.   

http://www.csmonitor.com/2006/0425/p02s01-usec.html

In deregulation of electric markets, a consumer pinch Competition was supposed to lower prices in deregulated states. But faster-rising rates there are spurring a backlash.  It's the slow season for the Laundromat in tiny Milford, Pa., yet owner Darryl Wood has raised the price of a wash by 50 cents this year, to $2.50. The reason? It is because electric rates that were supposed to drop have more than doubled since January, threatening to close the lid on a business his family has run for decades.

"I've already seen an electric bill higher than anything that I've ever gotten," he says. "I thought deregulation would bring rates down. Now, I'm just hoping we can hang on."  His ordeal reflects the fresh dismay many consumers are feeling about the deregulation of the electric utility industry. When deregulation was implemented in the 1990s, supporters said it would drive rates down through competition.

But data so far suggest that rates in deregulated states are rising faster than those in regulated states. That trend could expand as caps on retail electric rates, which have held prices down, are lifted in at least six deregulated states this year.

The issue is heating up:  In Maryland, where homeowners were threatened with a 72 percent rate hike this summer, deregulation is suddenly a major issue in the governor's race.  In Delaware, where Delmarva Power set forth rate jumps of at least 59 percent, lawmakers responded by phasing them in over several years and requiring power companies to do long-term planning.

Price comparisons are limited because rate caps are only just being removed. But in New England, where many caps came off last year, retail electric rates surged about 15 percent - except for Vermont, where regulated rates are roughly flat. In the Mid-Atlantic region, rates in deregulated New York have risen 16 percent since 2002, while rates in still-regulated West Virginia were about flat.

Such unexpected disparities are prompting a backlash in states that recently allowed markets to set wholesale and retail pricing. And it's fueling a debate over what went wrong.  Industry officials blame price spikes on higher fuel costs and rate caps set too low years ago. But fuel hikes are only a partial explanation, analysts say. Lack of competition and the ability of companies to sway markets to maximize profits may be factors, too, they say.

"There has been and is today no true competition in wholesale and retail electricity markets," the Electricity Consumers Resource Council wrote in a filing with the Federal Energy Regulatory Commission in November.  Power companies strongly disagree.  "Competition has been incredibly robust," says John Shelk, president of the Electric Power Supply Association. "People believe if prices rise something is wrong.... But the reason is the cost of [fuel] increased."

That hasn't cooled the anger in Pike County, Pa., which includes Milford, where residents are telling regulators that the doubling of their rates is outrageous. Just two suppliers bid in an auction to serve the area last October. "It seems a little fishy to some people," Mr. Wood says. "It's very bad for the economy here and for morale."

Some states are even considering re-regulation. But getting the "genie back in a regulated bottle" may be difficult or impossible, says Christie Rewey, an energy specialist at the National Conference of State Legislatures in Denver.  Many states sold their generating stations for a song in the 1990s, she says. Now these same states find that those old plants are a gold mine for their owners and would be very costly to buy back.

Today, 16 of 23 states that initially passed electricity deregulation offer a fully deregulated power system, studies show.  At least 34 states have repealed, delayed, suspended, or have limited retail access to just large customers or are no longer considering deregulating electricity for retail customers, according to a study last year.

Take Montana. It once had the region's lowest electric rates, but sold off its hydro-dams and deregulated in 1997. Some legislators there want the state to buy back those dams. "The power those dams generated for less than $20 per megawatt hour has jumped to over $31 since deregulation," says Don Judge, a political consultant in Helena, Mont. "It's ironic that we sold them in the first place, and now we're paying the price for making such a terrible mistake."

The Industry defends benefits of deregulation.  The re-regulation push worries some industry officials. "Absolutely, we are worried states will try to turn back the clock," Mr. Shelk says. "It would be bad for us, but in [the] long term bad for states, too."  Industry officials have launched a campaign called COMPETE to tout the benefits of competition. And they cite two studies showing that deregulation has saved consumers between $16 billion and $34 billion so far. But other studies by academics and power consumers dispute those findings.  

"At best, at this point in time, no discernible overall benefit to retail consumers can be seen from restructuring," wrote Kenneth Rose, an independent energy consultant, in an analysis of deregulation last year.  Consumer anger, others contend, is the surest sign that deregulation has not lived up to its promise.  Disappointment is strong in the PJ M wholesale power market, which covers a region with 51 million people in all or parts of 13 states, including Pennsylvania, New Jersey, Maryland, Delaware, Ohio, and Virginia.

In Pennsylvania, which deregulated electricity in 1996, most households are still protected by retail rate caps until 2010. Yet even Irwin "Sonny" Popowsky, the state's consumer advocate on utility pricing and a one-time booster of electricity restructuring, is shaken. "I'm just really disappointed and shocked by the results in places like Pike County, Maryland, and Delaware," he says. "This isn't the way deregulation  was supposed to work.  The consumer was supposed to be able to be free to pick a lower price provider."

Market prices in New York and New England (except Vermont), where rate caps have come off, are often set by the highest-cost facilities. "These generators all get paid as if they're running a natural-gas-fired machine at double or triple the rate - and that has thrown the equation off," says Gerald Norlander, executive director of the Public Utility Law Project of New York.

Analysts also blame poor competition in residential markets on the higher costs companies incur serving smaller customers. In Ohio, for instance, customers like Mary Babcock want to compare offers from the eight power companies doing business there. But she can't.  Instead of adding competitive pressure to sell electricity at lower cost, deregulation in Ohio has so far yielded just one company interested in selling Mrs. Babcock power - the same one that's sold it to her for years. "No competitive retail electric service providers are currently enrolling customers," says the Ohio Public Utilities Commission Web page.

That's bad news for Babcock. But it's far worse news for Bob Flygar, manager of Eramet Marietta, Inc., a southeast Ohio branch plant that makes alloys for hardening steel. Electricity rates that have leaped 50 percent since 2004 could mean "eventual demise of the Eramet plant" and 400 jobs, he testified before the state utilities commission last October.

"We need a healthy dose of real competition," says John Anderson, president of the Electricity Consumers Resource Council. "We were deregulation's first supporters. But all we've really done is go from one regulatory structure to a new one that is less customer friendly."  He and other critics also allege that a key negative feature in each market is "market power" - an oligopoly situation that may be allowing generating companies to whipsaw prices upward.

Market power worries Howard Spinner, director of economics and finance for the Virginia State Corporation Commission. In his analysis of PJM's market data from last year, Mr. Spinner found 41 generating units he says may be employing a strategy of "economic withholding," which could effectively cut power supplies and raise prices. But he's not certain, since PJM won't release critical data for analysis - something the transmission organization denies.

"We've heard these charges before," says Ray Dotter, a PJM spokesman. "Our independent market monitor has consistently said it is competitive."  Hockey-stick bidding: Market power in action?  But Dr. Rose, the energy consultant, sees what may be subtle attempts to influence prices through strategic bidding that, when graphed, resembles a hockey stick. He points to July 27, 2005 - one of the hottest days in PJM last summer - as a case in point.

A big power company started the bidding with a very low offer: 4,300 megawatts for zero dollars or other nominal amounts, Rose says. It offered the next 2,700 megawatts at gradually higher prices until it reached $100 per megawatt hour. But the last 1,000 megawatts were offered at $200 to $1,000, and it's those last high-cost blocks of power that often set the rate overall.

That, he says, could be evidence of market power.  PJ M officials strongly reject allegations of tacit collusion. On the hot summer day in question, prices peaked at $512 per megawatt hour. Hockey-stick bidding is "a common market mechanism," says Joseph Bowring, PJ M's internal watchdog. It ensures prices high enough to lower consumption and "keep the market from running out of power."

Back in Milford, officials will soon hold hearings into the power auction process. And hopes are growing that a new auction may be held and a lower-cost supplier found.  "All the consumers up here are saying: 'Now, I see how this deregulation works,' says David Wilson, executive director of the Pike County Chamber of Commerce.

                 

 

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