PUBLIC INTEREST BLUEPRINT FOR ELECTRICITY RESTRUCTURING

[Matt Freedman <freedman@citizen.org>]

                          CITIZEN ACTION
                       ENVIRONMENTAL ACTION    
                          PUBLIC CITIZEN
                 U.S. PUBLIC INTEREST RESEARCH GROUP
                                       
  FOR IMMEDIATE RELEASE:                         
  June 19, 1996      
  
  CONTACT:
  Matthew Freedman 202-546-4996 x352 / freedman@citizen.org
               
  PUBLIC INTEREST COALITION RELEASES UTILITY RESTRUCTURING BLUEPRINT 
  CALLS TO PROTECT CONSUMERS AND PROMOTE SUSTAINABLE ENERGY USE 
               
  A coalition of national and state public interest groups today
  called for making environmental and consumer protection top
  priorities in any efforts to introduce competition in the
  electric utility sector.  The coalition released Power for the
  People, a blueprint outlining a comprehensive set of policies
  designed to protect consumers from higher bills, promote energy
  efficiency and renewable energy programs, guarantee service for
  low-income and rural customers and ensure that utilities do not
  receive full recovery of costs associated with uneconomical
  investments.
  
  A handful of states are currently considering legislation and
  regulatory changes that would radically alter their electricity
  systems and introduce competition at the wholesale or retail
  level.  New Hampshire, for example, recently initiated a retail
  pilot program that allows consumers to choose their electricity
  supplier.  At the federal level, several members of Congress are
  preparing to introduce legislation that could require states to
  move to competition in the next several years.
  
  "Our blueprint represents a roadmap for moving towards a
  competitive market that will benefit consumers and the
  environment without bailing out utilities or abandoning strong
  commitments to energy efficiency, renewable energy and low-income
  consumers," said Matthew Freedman, Energy Policy Analyst for
  Public Citizen's Critical Mass Energy Project.
  
  The blueprint, coreleased by public interest groups in eight
  states, stands in stark contrast to efforts undertaken by various
  industry and utility associations which fail to address many key
  concerns, offer vague principles, and are designed primarily to
  further a particular industry's interest.  Power for the People
  provides clear and effective policies that, if implemented, would
  counter the worst potential abuses of a competitive electricity
  system.
  
  On the heavily debated issue of utility stranded cost recovery,
  the blueprint calls for the burden to fall on utility
  shareholders in all but the most extreme circumstances. 
  "Utilities must take responsibility for making bad business
  decisions that resulted in uneconomical power plants.  The
  ratepayer bailout now contemplated by state regulators would
  force consumers to pick up the tab for windfall profits for
  poorly-run utilities." said Anna Aurilio, Staff Scientist for the
  U.S. Public Interest Research Group (U.S. PIRG).  Early estimates
  for the recovery of these costs requested by utilities range
  between $130 and $550 billion.
  
  Policies to develop cleaner energy sources are also addressed in
  the blueprint, which calls for all electricity sellers to support
  a minimum portfolio of renewable energy resources at levels
  higher than exist today.  "States must make renewable energy
  development a priority because of its substantial environmental
  and long-term economic benefits.  These benefits are likely to be
  tossed aside if policymakers focus on short-term costs and ignore
  the consequences of emissions from fossil and nuclear plants,"
  said Wenona Hauter, Environmental Program Director for Citizen
  Action.  The move to competition has already frozen many utility
  commitments to new renewable resource development and threatens
  to result in the loss of existing solar, wind, biomass and
  geothermal projects across the country.
  
  Risks to low-income and rural consumers could leave them
  vulnerable to higher bills and poorer service in a competitive
  market.  The blueprint would require that states ensure universal
  service, access to competing suppliers, bill assistance,
  reasonable payment policies, emergency service and affordable
  rates.  "Low-income consumers and rural communities have the most
  to lose in the move towards competition.  We must guarantee that
  they are able to realize benefits from any new utility system,"
  said Kay Guinane with Environmental Action.
  
  Other issues covered in the blueprint include:
  
       - a requirement that utilities legally separate their
       business units and divest all generating plants.  States are
       also encouraged to take control of the transmission system
       and operate it themselves or under the auspices of an
       independent, non-profit agency.
  
       - creation of an independent energy agency to administer and
       oversee energy efficiency, low-income, universal service and
       research & development programs.
  
       - implementation of a system benefits charge and universal
       service charge to support energy efficiency, research &
       development, low-income, bill assistance and rural consumer
       programs.
  
       - a requirement that old fossil fuel plants meet the same
       emissions standards applied to new plants in order to
       compete in new electricity markets.  
  
  The blueprint was released today by organizations in California,
  Colorado, Georgia, Illinois, Iowa,  Massachusetts, Minnesota and
  Texas.  A list of coreleasing groups is available on request.
  
  Copies of Power for the People can be obtained from Public
  Citizen (Telephone: 202-833-3000) at a price of $20.  Public
  interest groups are eligible for discounts.
  
                                ##                                  
                   
  Public Citizen is a non-profit consumer advocacy group founded by
  Ralph Nader in 1974.  The Critical Mass Energy Project is Public
  Citizen's energy policy arm.
  
  Citizen Action is a national environmental and consumer group
  with three million members.
  
  Environmental Action is a non-profit, educational research and
  advocacy organization founded to clarify the critical
  relationship of utility corporate structures to environmental and
  consumer protection.
  
  U.S. Public Interest Research Group (U.S. PIRG) is the national
  lobbying office for the state PIRGs which are non-profit,
  non-partisan consumer and environmental advocacy groups active
  across the country.
  
  Matthew Freedman               \\\
  Public Citizen                (+ +)   freedman@citizen.org
  Critical Mass Energy Project    *
  215 Pennsylvania Avenue SE      =
  Washington, D.C.  20003
  Phone: (202)546-4996 x352