Administration Unveils Electricity Deregulation Proposal

The Clinton Administration, hoping to give impetus to electricity-deregulation legislation that is languishing in Congress, has come out with its proposal to restructure the electric utility industry. The plan, announced March 25, would require that all consumers be able to choose their electricity supplier by Jan. 1, 2003. States and unregulated utilities, however, would be allowed to opt-out of this competition mandate if they find that consumers "would be better served by an alternative policy."

The proposal also calls for a $3 billion fund to support conservation and energy-efficiency technology; creation of an industry organization to establish and enforce reliability standards; a requirement that electricity sellers disclose the price and environmental attributes of their power supply; and a provision that individual states continue to determine how best to enable utilities to recover "stranded costs" (high-cost investments in powerplants they might no longer need in an open market).