Former US senator criticizes states eyeing utility re-regulation

Washington (Platts)--1Mar2006

Former US Senator Don Nickles Wednesday criticized states that are
considering legislation that would extend price caps on electric utility
rates, rather than allowing the competitive market to determine the price
customers pay.

     Speaking at the Washington conference sponsored by the KEMA consulting
firm, Nickles said legislation introduced in Illinois and Maryland that would
extend capped rates is "not well thought out." Nickles is chairman of the
Compete Coalition, an organization that represents 130 merchant generators,
retailers and customers groups that advocate retail electricity competition. 

     He said the group intends to take a more active role at the state level
to counter some of the backlash against competitive markets in certain states.

     Nickles warned against the temptation to blame today's high energy prices
on competition, saying that that "line of thinking ignores the fact that high
prices are not the product of competitive electricity markets." Returning to
cost-of-service regulation would limit the availability of customer choice,
and deny consumers the benefits of competition in the long run, he said. 

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