"It could have been worse."
"It says to the market, `It won't be so bad.' It will take longer now, so that's better for the utilities."
"It creates a new bureaucratic entity that will make regulatory choices."
"It's regulated deregulation. It's alarming if that's the prototype for the nation."
That's the word, respectively, from Barry Abramson at Prudential Securities, Edward J. Tirello, Jr. of NatWest Securities, Steven Fetter at Fitch Investors Service, and Dan Scotto of Bear Stearns. I spent some time on the phone a few weeks ago with each one, asking for their thoughts on the latest proposal (two, actually) from the California Public Utilities Commission (CPUC) to restructure that state's electric utility industry.
It began in April 1994 with the "Blue Book." The CPUC announced what it called "A Vision for the Future of California's Electric Services Industry." Out with centralized government planning. In with consumer sovereignty. But the "vision" soon stalled at a crucial juncture: Where do we start? With the retail market, through direct customer access and one-on-one (bilateral) energy contracts? Or in the wholesale market, with a central pool ("PoolCo") that would manage the transmission systems and decide which plants would run and which would not?
Last winter, we put the vision to the test. In our issue of January 1, 1995, we invited a dozen or more experts to comment on that key issue, PoolCo vs. Bilateral Markets. Sadly, it didn't do any good. On May 24, the CPUC gave up. Led by president Daniel W. Fessler, the CPUC voted 3-1 to propose both a statewide PoolCo (abandoning retail wheeling for now) and direct customer access (an alternative view offered by dissenting commissioner Jessie J. Knight, Jr.). Two proposals. Twice the vision?