Arkansas PUC advises delay on electric deregulation

The Arkansas Public Service Commission recommended to the State General Assembly that deregulation be delayed until at least October 2003 but no later than October 2005.The current law calls for deregulation to begin between Jan. 1, 2002 and June 30, 2003. The original time frame does not allow time to develop the appropriate market structures including a fully functioning competitive wholesale market and a regional transmission organization, the commission said in a report released last week.


The Arkansas Public Service Commission has recommended to the State General Assembly that deregulation be delayed until at least October 2003 but no later than October 2005.

The current law calls for deregulation to begin between Jan. 1, 2002 and June 30, 2003.

The original time frame does not allow the state sufficient time to develop the appropriate market structures, including a fully functioning competitive wholesale market and a regional transmission organization, the commission said in a report released last week.

�There is little likelihood of demonstrating that retail competition would be in the net public interest within the current time frame,� the report stated.

The commission said it needs more time to study electric restructuring in other states across the country and to take the lessons learned in those states and apply that knowledge to Arkansas. By extending the deadline for competition to begin, the Arkansas legislature will have two more sessions where changes can be considered to the original legislation, the commission said.

The commission advised the extension so the adequacy of generating capacity can be addressed and industrial concerns can be addressed. An extended time frame also gives regulated utilities a sufficient planning period to decide if they want to acquire additional generating capacity.

The commission said market participants such as end user groups, utilities, and merchant groups agreed to the delay.

The roll back of deregulation in Arkansas is part of a larger backlash against deregulation in various states. Montana, Oregon, Nevada, New Mexico, and others are making changes to their deregulation proceedings, including delay and even postponement.

Problems in the functioning of wholesale markets and less than robust retail markets for consumers have emerged in California, New York, and in New England.

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