Citing backlash, Wisconsin firm withdraws competition plan

Backlash caused by the California electricity crisis has prompted Wisconsin energy company WPS Resources Corp., Green Bay, to withdraw its customer choice program from consideration by state regulators. The company's Generation Next! proposal, under review by the Public Service Commission of Wisconsin, was developed to help create a competitive state electric generation market. Tuesday, the company said it withdrew its program until it can offer modifications.


By the OGJ Online Staff

HOUSTON, Feb. 21´┐ŻBacklash caused by the California electricity crisis has prompted Wisconsin energy company WPS Resources Corp., Green Bay, to withdraw its customer choice program from consideration by state regulators.

The company's Generation Next! proposal, under review by the Public Service Commission of Wisconsin (PSC), was developed to help create a competitive state electric generation market. Tuesday, the company said it withdrew its program until it can offer modifications.

In a statement, WPS Resources CEO Larry Weyers said the company still believes in the proposal, but "unfortunately, with California's experiences with electric shortages and high prices, most customers today seem to accept the current system of utilities building and owning electric plants."

The program contained a provision allowing the utility to transfer generating assets to an unregulated subsidiary, and it was incorrectly linked with California's deregulation experience by many customers, he said.

California's restructuring law required state utilities to sell most of their generating assets to third parties and buy most power in the day-ahead market rather than under long-term contracts. When wholesale prices rose, the companies were not allowed to pass on the full amount under a retail price freeze that was part of the restructuring law.

Weyers said WPS Resources, parent company of regulated utility Wisconsin Public Service, plans to review its proposal and could make minor changes to ease customer and stakeholders concerns, and refile with the PSC. He reiterated his feeling that the proposal was based on sound concepts and a refiling would contain only a few alterations.

"Customers in Wisconsin will be better served by competition than by regulation in the long run," Weyers said. "We will continue to pursue the principles that will help create a competitive generation marketplace with many suppliers, without the transfer of existing assets."

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