WASHINGTON, D.C. -- A more competitive electricity marketplace is in the best interests of all those who have a stake in the present system, Pennsylvania Power & Light Co.'s chairman said at a national conference here Thursday (2/29).
"At PP&L, we support choice for all customers, and we will work with all interested parties to bring it about," said William F. Hecht, chairman, president & chief executive officer of the Allentown-based utility. He made his remarks during a panel discussion that was part of the National Association of State Utility Consumer Advocates conference.
Hecht emphasized a successful transition to more competition must involve both the federal and state governments.
"We believe that there is a need for federal legislation to provide a basic framework for a more competitive industry and a general timetable for implementation. The states then should establish specific rules for their constituencies, recognizing the wide variations in customer mix and the configurations of various systems," he said.
It is possible for all Pennsylvania customers to have the opportunity to choose their electricity supplier by 1999, Hecht said.
The transition to a more competitive electricity marketplace can be very successful if utilities, regulators, customers and consumer groups collaborate in establishing a new system, Hecht said.
"A successful competitive transition for the electric utility industry will require what is perhaps an unprecedented collaborative effort," said Hecht. "Such a collaborative effort will allow us to take full advantage of the potential benefits of increased competition and to ensure that all types of customers are treated fairly in the transition process."
He also pointed out that a more competitive electricity marketplace has the potential to improve the global competitiveness of American business and industry.
Hecht outlined four basic principles that PP&L believes are essential in the transition to a more competitive electricity marketplace:
-- All customers must have the right to choose their electricity supplier.
"The correct structure and an appropriate transition plan can help us ensure that all customer classes have an opportunity to benefit from the open electricity supply market. This structure must ensure that residential customers have an opportunity to participate," said Hecht.
-- There must be a continuation of reliable electric service.
"It is our view that a plan like the one recently put forth by the Pennsylvania-New Jersey-Maryland Interconnection, combined with oversight by state regulators, can address any reliability concerns," Hecht said.
-- We must find an appropriate mechanism for funding social programs.
"Those who are most vulnerable in our society must not be left in the dark by the move to a more competitive electricity marketplace. An alternative to present methods for funding social programs would be a levy on all types of energy consumption in the home — not just electricity," said Hecht.
-- We need to establish an acceptable way to deal with transition costs.
"We need to ensure that utility shareowners — who have invested billions of dollars into building a successful electricity infrastructure — are treated fairly in this transition. Prudent investment costs could be recovered through a rider on bills that would exist only for a limited period. Other costs, arising from federal and state requirements, could be collected over the lives of the facilities, the contracts or the obligations with which they are associated," Hecht said.
Hecht said PP&L is willing to work with all interested parties to structure a transition plan. "We see this conference today as an important opportunity to spark the further discussions that are essential to the forging of a workable transition."
Pennsylvania Power & Light Co. is the electric utility subsidiary of PP&L Resources Inc. The utility serves more than 1.2 million customers in 10,000 square miles of central and eastern Pennsylvania. Hecht serves as chairman of both the utility and PP&L Resources.