No Turning Back from Movement toward Uniform Business Practices in Energy Markets, State Regulators Told

WASHINGTON, D.C.-There's no stopping the trend toward uniform business practices (UBP) in energy markets, Ken Malloy, president of the Center for the Advancement of Energy Markets (CAEM), told state utility regulators.

Speaking at the winter meetings of the National Association of Regulatory Utility Commissioners (NARUC) March 8, Malloy said, "A genuine movement toward uniform business practices has begun and there is no turning back."

Malloy and Jim Gallagher of the New York Public Service Commission staff addressed a rare joint meeting of four NARUC committees-Electricity, Natural Gas, Consumer Affairs, and Energy Resources and the Environment. Malloy and Gallagher provided background on the uniform business practices movement and on a NARUC study of UBP being conducted by CAEM. The NARUC project, initiated at the association's annual meeting last year, will conclude in July with a report to the membership. Gallagher is co-chair of the NARUC Staff Subcommittee on Energy Resources and the Environment.

Malloy outlined to the joint committee the dramatic rise in activity since the third quarter of 1999 by the Coalition for Uniform Business Rules (CUBR), the Edison Electric Institute (EEI), the American Gas Association, the Gas Industry Standards Board, the National Rural Electric Cooperatives Association, and the National Consumer Law Center.

Using an analogy to computers, Malloy asked, "What if each state mandated a different operating system and software manufacturers had to make a Connecticut version, and a Minnesota version, etc., of each software package that they wanted to market? Does anyone think that it would not have a detrimental impact on consumer choice and the cost of software? What's the difference between different business practices in each state for enrolling and billing a customer?"

After the presentation by Malloy and Gallagher, the joint committee heard from a panel consisting of a marketer, a utility representative, a consumer representative, and a state commissioner. The panelists outlined their perceptions of the UBP movement and how NARUC should react to it and incorporate its outcome into state regulatory policy.

Earlier in the winter meetings, NARUC held a workshop, facilitated by CAEM, for those who are not part of the ongoing EEI-CUBR negotiations on UBP. More than 50 representatives of consumer groups, environmental organizations, regulatory agencies, and utility cooperatives attended the two-day session to discuss the fast pace of events on UBP.

Malloy noted that in the recently released RED Index 2000, a study by CAEM ranking states on 18 different building blocks of the competitive market, no state received full credit for progress on UBP.  Now ten states received partial credit, and only three states received negative credit for letting each conduit company set different business practices. Information about the Red Index 2000 can be found at www.caem.org.

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The Center for the Advancement of Energy Markets (CAEM) is an independent, nonprofit think tank whose mission is to promote an effective transition from the monopoly model of regulation to the competitive or customer choice model. Ken Malloy has been a public official with the Federal Energy Regulatory Commission, the Illinois Commerce Commission, and the U.S. Department of Energy.