February 15, 1998 in City

Deregulation Surge Now A Standoff Uncertainty Over Rates Has Both Parties Afraid

By The Spokesman-Review
 

Lawmakers who’ve been circling each other over energy deregulation now seem locked in a political sumo wrestling match, with neither side willing to relinquish its hold.

The result is an awkward bipartisanship that’s made for unusual compromises.

Republicans - once eager to overhaul the way electricity is bought and sold - recently agreed to postpone a formal proposal for at least a year.

Some opposing Democrats, meanwhile, have agreed to support legislation that could be a necessary first step toward making such an overhaul law.

“There’s a lot of gaming going on here,” said Aaron Jones of the Washington Rural Electric Cooperative Association in Olympia. “Neither party wants to take a wrong step. Instead they’re doing, ‘I’ll take a little step if you’ll take a little step.”’

It’s a complex debate happening nationwide, and neither party wants to drop the ball. The reason: Energy deregulation has potentially huge implications for businesses’ bank books and homeowners’ wallets.

“Let’s imagine, three years from now, that 45 states are restructured and reaping benefits but Washington isn’t,” Jones said. “Nobody wants to be the party that kept those benefits from their consumers.”

The push for deregulation came from Congress, the power industry and large businesses, which could benefit from the ability to buy electricity on the open market. Some free-market Republicans also believe that can only help homeowners.

Democrats and some other Republicans are skeptical. They point to studies suggesting that Washington rates could rise with deregulation, as high-cost areas like New England start buying Northwest power and pushing prices up.

“If someone gets cheaper energy, then someone else is going to get more expensive energy,” energy consultant Merrill Schulz said. “It’s a zero-sum game.”

Since Washington already has the lowest electricity rates in the country, neither side wants to go it alone. In December, Sen. Bill Finkbeiner, R-Redmond, a deregulation proponent, said he had drafted a bill and was waiting only for Democratic Gov. Gary Locke to list it as a priority for 1998. Locke, at the time, said he was waiting for Republicans to take charge.

The result was stalemate. Whichever party took the lead could be attacked by the other in November, Finkbeiner said.

It wasn’t an unreasonable assumption.

Last month, as U.S. Rep. Rick White, R-Seattle, had a West Side conference on energy deregulation, a labor-backed organization ran radio advertisements condemning him as willing to tinker with low electricity rates.

“The battle lines were pretty clearly drawn,” said Peter Schalestock, a spokesman for White in Washington, D.C.

Then, as the 1998 Legislative session kicked into gear, Sen. Lisa Brown, D-Spokane, filed a bill designed to protect consumers and their rates in the event of deregulation.

“My concern is the small ratepayers,” Brown said. “I don’t hear them clamoring for change.”

Finkbeiner quickly filed an almost identical bill, which gave him and the GOP a chance to boast that they, too, were watching out for homeowners. “We’ve got to raise folks’ comfort levels,” Finkbeiner said. “We have to let them know we’re not going to act irresponsibly.”

Since then, the senators have joined forces, agreeing to push for adoption of Brown’s bill, with Finkbeiner as a co-sponsor.

“We’ve decided to work together but agree that we don’t necessarily see the issue in the same light,” Brown said.

Meanwhile, in the House, Rep. Larry Crouse, R-Spokane, filed a bill requiring power companies to spell out the different costs and charges that consumers pay. While such so-called “unbundling” is seen by many as a precursor to industry deregulation, some Democrats are supporting the move.

“We can’t keep our heads in the sand on this,” said Rep. Erik Poulsen, D-Seattle, and a supporter of that measure. “Besides, this just provides more information and that’s going to make deregulation even harder.”

All sides agree that a bill formally proposing to deregulate the power industry - one of the most massive undertakings of the decade - likely will be filed next year.

But the complexities have some believing actual deregulation is many years away.

“I think they were surfing a wave of momentum, but the tide is receding,” Schulz, the consultant, said. “Now people are wanting to take a much more critical look.”

, DataTimes


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