ADVOCACY ISSUES
Electric Utility Deregulation
BOMA Position:
BOMA fully supports the transition towards a competitive marketplace
for electricity through the unbundling of generation, transmission
and distribution. The generation of electricity must become competitive
as soon as possible so that all Michigan consumers may realize the
benefits of lower prices and enhanced services. Michigan lawmakers
should support federal guidelines for reliability, reciprocity and
stranded costs, but still allow Michigan the flexibility to meet our
specific needs.
Background Information:
On July 9, 1996, the Federal
Energy Regulatory Commission (FERC) instituted its “open access” rule
for wholesale transactions, which allowed wholesale purchasers to buy
electricity
from their supplier of choice. Congress, state legislators and public
utility commissions are now actively debating opening electricity markets
for retail sales.
About half of the states have enacted legislation
and/or regulations to restructure their electricity markets. Unfortunately,
some of the
states that have already opened their energy markets are now struggling
to meet the challenges caused by these immature marketplaces, such
as brownouts and erratic price fluctuations.
Recent Activity:
During
the 106th Congress (1999-2000), comprehensive federal legislation
was approved by the House Energy and Power Subcommittee,
but was never considered by the full Commerce Committee. In the
Senate, a much narrower reliability bill was passed but ultimately
died since
Congress adjourned prior to House consideration of the measure.
In the 107th Congress, look for similar bills to be reintroduced and
hearings to begin anew. BOMA International expects the debate
to continue
to shift from implementing a national retail marketplace to protecting
the reliability of the nation's electricity grid and promoting
fair competition in the wholesale energy marketplace.
Action Requested:
Deregulation of the nation's electricity markets is a
long, involved process. Some setbacks are bound to occur;
these should not be treated as failures in deregulation but
rather as challenges
to achieving a robust, competitive energy marketplace. To obtain
our goal, it is imperative that BOMA members become involved
and stay involved.
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