White House on Power Play

Article excerpt

The Clinton administration outlined its plan yesterday to deregulate the electric power industry by 2003, allowing consumers to choose their electric company in much the same way they pick long-distance telephone service.

The White House plan aims to jump-start similar initiatives in Congress at a time when efforts to revamp the $200 billion industry have become mired in a complicated squabble among industry groups, consumer advocates and environmentalists.

"Americans should have the right to choose their own electricity suppliers," Energy Secretary Federico F. Pena said at a briefing yesterday. "We believe that people will make better decisions for themselves than monopolists and regulators."

Under the administration proposal, state governments and unregulated utilities would have to open their electricity markets to competition by Jan. 1, 2003, unless they can make the case that they should be allowed to "opt out" of the directive.

Mr. Pena estimated that scrapping the 60-year-old system of regulated utilities would save U.S. consumers $20 billion a year directly or through the reduced cost of other products. Those savings would add up to $232 a year for an average family of four, he said.

"The system of regulated monopolies worked well when we were trying to build a reliable utility sector to light our homes and power our factories. But it does not work well in today's fast-paced, inter-connected world," Mr. Pena said.

That premise has gained momentum during the last few years. About a half dozen deregulation bills have been introduced in Congress, and 16 state governments have passed legislation, including the Maryland and Virginia general assemblies.

But beyond the broad "principles" in the administration's plan lies a string of political pitfalls, especially in the Senate. Key lawmakers there, like Senate Energy and Natural Resources Committee Chairman Frank H. Murkowski, Alaska Republican, are more inclined to leave the issue up to the states.

Mr. Pena conceded yesterday that there isn't much time left in the current Congress to take up the administration's plan. But he said lawmakers would make a "Herculean" effort to pass legislation by the end of the year.

"We're going to give it our very best shot to get it done this year," he said.

Foremost among the political pitfalls are new environmental regulations like those contained in yesterday's proposal. As part of deregulation, the plan would force power companies to increase their use of environmentally friendly, renewable sources of energy like solar and wind power. …