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News Release
Report Recommends Against Competition for Residential Electricity Customers at This Time
December 12, 2002 (2002 - 036)
Contacts:  Roy Hemmingway, Chairman, 503 378-6611; Joan H. Smith, Commissioner, 503 378-6611; Lee Beyer, Commissioner, 503 378-6611; Bob Valdez, Public Information Officer, 503 378-8962
Salem, OR – Residential consumers would not benefit at this time from a choice of competing power suppliers, according to a just-released report by the Oregon Public Utility Commission.
The state's electricity restructuring law passed in 1999 required the PUC to report to the Legislature by Jan. 1, 2003, on whether residential consumers would benefit from buying power from competing suppliers at market prices.
The PUC report concluded there would be few if any suppliers competing for residential customers. It also found the cost of implementing a competitive residential power market exceeds the likely benefits at this time.
In addition, the report states residential consumers would have to spend a lot of time reviewing their energy options and educational efforts may be only partially successful.
"Because electricity is a necessity, the stakes are high for consumers who unwittingly find themselves subject to price swings tied to the volatile wholesale power market," Commission Chairman Roy Hemmingway said. "A broad education effort would be necessary to inform customers of potential risks from leaving their regulated utility."
The report stated it is not yet evident in Oregon how well competition will work for even the largest business customers. Further, it found that only a few states that have opened their retail electric markets to competition have several suppliers serving residential consumers, and any reduction in their electric rates is largely the result of requiring competing offers to be lower during a transition period.
Since March, residential customers have had a menu of new rate options provided by PGE and PacifiCorp that provide more choices without the risks of a competitive power market. In addition to Basic Service, there are three renewable resource options and at least one option that can reduce energy bills for customers who cut back on electricity use during high-cost times.
So far, about 30,000 residential consumers have chosen the new options. Consumers remain with their regulated utility, and the PUC sets prices and oversees the way utilities administer the options. Rates cannot be changed without PUC approval.