Allegheny Power opposes bill

March 27, 1998|By GUY FLETCHER

Allegheny Power opposes bill

ANNAPOLIS - Allegheny Power, which has been a vocal supporter of electrical deregulation, is opposing legislation in the Maryland General Assembly that would accelerate competition in the state.

Company officials said that while they support the concept of competition, they oppose the way some lawmakers are trying to achieve it, in an amendment that could be added to an existing piece of legislation.

"The biggest problem is there has never been a public discussion," said Carolyn Shaw, state government affairs manager for Allegheny Power, a Hagerstown-based utility that has 1.4 million customers in five states.


Shaw said a public hearing should be held before the legislature takes such a step.

She said the company is not backing away from its support for deregulation, under which people would choose electric providers in much the way they choose long-distance companies.

"We think competition would benefit everyone and everyone will see decreased rates," she said.

Shaw said it isn't known what impact the amendment would have on customer rates or service. But she said the bill could greatly limit Allegheny Power's flexibility in managing the complex issues of customer choice.

Deregulation was not supposed to be undertaken during the 90-day General Assembly session that ends April 13. It was to be handled in comprehensive legislation, possibly next year.

Allegheny Power and other utilities participated in discussions with state regulators that led to an agreement to implement deregulation by 2002.

Senate leaders, saying the state must show it's serious about deregulation, plan to add language to another utility bill that would mandate deregulation as soon as 2000. The amendment could be added today.

Alan J. Noia, chairman, president and CEO of Allegheny Power, sent a letter to senators this week expressing his "strong concern" with the amendment.

"The electricity restructuring issue touches the lives of all Marylanders and cannot be treated as mere amendments to existing legislation," Noia wrote.

Shaw said the legislation does not address critical areas of deregulation, such as the possibility of taxing out-of-state utilities that would serve Maryland customers.

Nor does the legislation deal with how state companies would recoup the so-called "stranded costs," the money utilities pay for equipment that might not be recouped through rates in a competitive market.

Both issues could be covered in a comprehensive bill, Shaw said.

The state's Office of the People's Counsel, which represents utility customers in rate cases and other matters, agreed that the amendment was too much too soon.

"We're not necessarily in favor of legislation mandating a date when there has to be deregulation," said John Sayles, an assistant people's counsel.

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