At the end of the 20th century, Americans began to move away from regulated monopolies in several businesses, including the airline, railroad and telecommunications industries. The argument for deregulation was simple: A competitive marketplace would better ensure the development of new products and services at lower prices. In the late 1990s, the movement spread to what many have called the last remaining major regulated monopoly - the electric utility industry.
In 1999, electric restructuring was one of the biggest issues considered by the Arkansas General Assembly. After an intense debate, lawmakers approved Act 1556 of 1999, which would have opened the retail electricity market in the state to competition as early as Jan. 1, 2002. Under that law, most Arkansans would be able to choose who supplies their electricity, just as they can choose their long-distance telephone carrier.
After major problems occurred in California's newly deregulated electric industry in 2000 and 2001, Arkansas lawmakers and regulators decided it was time to slow the process down in Arkansas. Because electric restructuring is so complex, they decided the state would not be ready for a competitive retail electricity market, also known as retail open access, by the original start dates. So, the Arkansas Legislature in 2001 approved Act 324, which delayed the beginning of retail open access to sometime between Oct. 1, 2003, and Oct. 1, 2005. Act 324 also contained important provisions designed to protect consumers that were supported by the Electric Cooperatives of Arkansas. Included in the law was the requirement that retail open access could not begin until the Arkansas Public Service Commission had determined that most customers, particularly residential and small business, would save money on their electric rates in a deregulated market.
After the 2001 session, it became clear that most Arkansans would not save money on their electric rates in a deregulated electric industry for at least the next decade. Studies show that their rates in a deregulated market would actually be higher than the regulated rates for the near term. That is a major reason why the Electric Cooperatives of Arkansas supported the repeal of Act 1556 of 1999, which occured in the 2003 legislative session.
To date, 24 states and the District of Columbia have either enacted legislation or have implemented a regulatory order to implement retail open access, but there has been no true success story. Every state that has implemented retail open access has experienced some difficulties, including price increases, price volatility and operational problems.
Throughout the debate on deregulation legislation, the Electric Cooperatives of Arkansas have fought for provisions designed to protect consumers. As in the past, the cooperatives will continue to stand firm as consumer advocates regarding electric restructuring or any other industry issue that affects cooperatives' members. That is because the cooperatives are consumer-owned and democratically controlled. And that is why, with the Electric Cooperatives of Arkansas, the consumer always comes first.
ELECTRIC COOPERATIVES OF ARKANSAS
1 Cooperative Way
Little Rock, AR 72209
501-570-2200
()
|
