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CA Dereg. May Derail OR's Model Approach
California's tumultuous experience with restructuring has prompted numerous proposals in the Oregon legislature to delay or repeal the state's yet-to-be implemented restructuring law. Congressman Peter DeFazio (D-Eugene), a vocal critic of restructuring, bolstered the effort last month by launching a fiery attack on SB 1149. Oregon's Chamber of Commerce has declared its concern while Portland's mayor, Vera Katz, proposed a five-year delay in implementing the new law.
Joined by both small and large business associations and the Oregon Public Utility Commission, advocates for consumers, low-income households and the environment remain steadfast in their support of SB 1149 and emphasize the stark differences between restructuring in Oregon and California.
California required utilities to sell most of their generation and to rely heavily on the short-term spot market, a key component of the state's restructuring law which many analysts cite as the cause for recent volatility and price spikes.
Oregon's approach is fundamentally different. The vast majority of generating plants in Oregon won't be sold. Any profit from power plant sales would go back to all customers, not to shareholders. Utilities and large customers opting for access to the market would be able to sign long-term power contracts and would be under no obligation to buy power on the spot market.
Under SB 1149, only large commercial and industrial customers would face the retail market, and only if they opt to go it alone. Oregon utilities would retain the obligation to serve large customers. Residential and small commercial customers would get the best of both worlds. They would remain with their utilities and have the option to choose from a portfolio of power products, including green alternatives.
Steven Weiss