COMPETITION WOULD CUT COSTS FOR ELECTRICITY, EXPERTS REPORT (POWER PLAY: DEREGULATION IN THE 21ST CENTURY) (FIRST IN A SERIES)

The nation may pull the switch on electric utility monopolies and open the door to retail competition by the turn of the century or soon after.

Power company officials, regulatory experts and state and federal lawmakers insist that deregulation will happen.

That would be a dramatic change for an industry that has been largely regulated at the state level since the early 1900s and at the federal level since 1935.

Competition would lead to lower electric bills for all consumers, experts say.

Nationwide, it is estimated a family could save $18 to $26 a month on its electric bill.

Consumers could buy their power from any number of suppliers. The power would come to your home or business over the local utility company lines, most experts predict.

Deregulation, they say, would occur at the power generation level, not at the transmission and distribution level.

Some free-market advocates want to allow competition at the transmission and distribution levels too. But the current deregulation efforts focus on power generation.

Four states, including California, have passed laws to deregulate the industry. California plans to open up the market to retail competition next year.

Another 44 states are looking at the issue.

Illinois is studying how to deregulate the electric industry and Missouri is preparing to do the same.

Congress is tackling deregulation too.

For the second year in a row, U.S. Rep. Dan Schaefer, R-Colo., has introduced a bill that would allow consumers in all 50 states to choose from among competing providers of electricity by Dec. 15, 2000.

Sen. Dale Bumpers, D-Ark., has introduced a deregulation bill that would mandate retail competition by December 2003 in every state except Texas, Alaska and Hawaii.

Bumpers excluded those three states because they aren't a part of the national power grid.

"The question is not whether to deregulate the electric utility industry because it is already happening on a state-by-state basis," Bumpers said.

He argued that the nation needs uniform guidelines rather than a state-by-state system of differing deregulation laws for the $200 billion electric industry.

Under deregulation, a consumer in the Midwest might get his electricity from a Utah power plant while his neighbor might settle on power from a New Jersey provider, Bumpers said.

Power companies and brokers would compete for customers in the same way that MCI, AT&T and others compete in the telephone industry.

Some political observers doubt Congress will approve a deregulation bill this year.

Many in Congress, including Rep. Jo Ann Emerson, R-Cape Girardeau, have yet to focus on the issue.

But Emerson said deregulation of any industry typically benefits consumers through lower prices and more services.

A 1992 federal law deregulated the wholesale power industry. It granted states the power to allow competition at the wholesale level.

Electric generation plants are free to sell power to utilities, but at this point they can't sell directly to the consumer.

But competition at the wholesale level is driving efforts to deregulate the retail market, said energy regulation consultant Charles Stalon of Cape Girardeau.

He is one of three utility experts advising Illinois Gov. Jim Edgar on legislation to deregulate the electric industry in that state.

The three experts will be paid $15,000 plus expenses for their work.

Stalon said Illinois, which is saddled with high-priced electricity in the Chicago area, may enact some deregulation measure this year.

Stalon favors deregulation as does the governor.

"I believe the increased competition will benefit all consumers and I want to make sure that all consumers are treated fairly," Edgar said in appointing the panel.

Stalon was a member of the Federal Energy Regulatory Commission from 1984 to 1989. Previously, he was a commissioner on the Illinois Commerce Commission. He once taught economics at Southern Illinois University-Carbondale.

He served as director of the Institute of Public Utilities at Michigan State University before retiring in 1993.

Stalon moved back to Cape Girardeau in 1994.

Retail electric competition in some form will be here by early in the next century, predicted utility regulator Karl Zobrist.

Zobrist chairs the Missouri Public Service Commission, which regulates utility rates in the state.

Even with deregulation, some consumer-protection laws will be needed, he said.

Missouri lawmakers are looking at setting up a joint House-Senate study group to look at the deregulation issue and propose legislation.

Some legislation could be introduced in the General Assembly next year, said state Sen. Wayne Goode, D-Normandy.

Goode and Rep. Gary Burton, R-Joplin, have proposed setting up a legislative panel to explore the issue.

Burton also wants to see more deregulation of the gas industry.

Goode said he wants to make sure that any electric industry deregulation benefits household consumers and not just the large, industrial users.