Early Results of Restructuring (as of June 2002)

The Bandwagon Starts Rolling

After California led the way with a comprehensive law in 1996 that started the restructuring process, several other states followed. (Actually, New Hampshire passed a restructuring law earlier than California, but implementation was delayed due to lawsuits by the Granite State's utilities.) By September 2001, 23 states and the District of Columbia had passed comprehensive restructuring laws, and many were already opening markets for competitive power sales. In New York, the public utility commission had effectively created a competitive framework, and in 18 states, legislative committees and other government organizations had been involved in examining various restructuring proposals. (See map, below.)

Restructuring Status as of September 2001

U.S. map showing status of electricity restructuring, by state, in September 2001.

Source: U.S. Department of Energy, Energy Information Administration, at http://www.eia.doe.gov/cneaf/electricity/chg_str/regmap.html. (Image text retyped for clarity.)

During the first years of restructuring, customers did not necessarily receive all the benefits promised by the most ardent competition advocates. In some states restructuring earned a deservedly bad reputation, while in others restructuring appeared to provide some benefits. And in still others, it remains too early to declare whether the outcome will be good or bad. In this essay, I outline the respective bad, good, and undecided experiences of three states. Because California constitutes the largest single market for electricity, and because its influence has been the greatest on other states-for better and for worse-it will receive the most attention.

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