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A Seat in the House

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I serve on the Legislative Council’s Interim Committee on Electric Utilities Restructuring and because electricity, and the rates we pay for the use of this resource, is important to all of us, I thought it might be interesting to discuss the electric utility restructuring issue in this week’s column.

In response to a national effort to deregulate the electric industry, the Idaho Legislature established the interim committee in 1977 to study electric restructuring issues. This was done in an effort to avoid unintended consequences on Idaho citizens if the state decided voluntarily to follow the national movement, or if as a result of national deregulation legislation, would be required to deregulate or restructure the industry in Idaho.

Our reliance on hydroelectric power presents unique challenges with respect to deregulation. Generation of hydroelectricity requires the use or appropriation of a public resource, namely the State of Idaho’s water. Because of the reliance of electric generation upon this state resource, electric deregulation in Idaho also involves issues of state sovereignty and the state’s ability to control the development of a resource that belongs to all Idahoans.

So where are we now? We continue to wrestle with the issue because deregulation is still a national issue. As committee members we recognize that because of our large amount of hydroelectric generation, the strength of Idaho’s electric power system has always been universal, reliable service at lower rates then most of the nation. The question we are trying to address then is:  what benefits, if any, can Idaho expect from deregulation of the industry?

Proponents of deregulation claim lower costs from competition will result, but since Idaho already has some of the lowest retail power rates, how will competition help us? In theory, competition could reduce power costs in high cost states, but many of us on the committee (in fact, maybe all of us) believe such reductions in these other states could result in higher rates for us in Idaho!

Given this, why are we still addressing the issue; why not just ignore the trend toward deregulation? The problem is that we are not just an island; our power system functions well, in part, because of our interconnectedness to other states in the northwest as well as the southwest and Canada. 

Also our power system, as well as the whole northwest power system, pivots around the Bonneville Power Administration that is responsible to federal, not Idaho law. The response of BPA to federal deregulation pressures will impact the power supply for Idaho.

Therefore, to a significant extent, Idaho’s choices on electric deregulation may be narrowed, or possibly in some cases, eliminated by congressional actions and/or decisions made by the legislatures of neighboring states. We have already been impacted by deregulation decisions made by California and Montana.

At worst Idaho may be driven to deregulation without any choice; at best, we may be able to carefully craft and structure a strategy and develop legislation to avoid broad deregulation that will help insulate Idaho ratepayers from resultant increases in electric power costs. Just as important, we want to prevent exportation of Idaho’s inexpensive hydroelectric power, which would be the same as exploiting our state's valuable water resource.

Deregulation of the electric power industry is an important economic issue for our state and our citizens and I feel fortunate to be a member of the interim electric restructuring committee. This committee will continue to address the electric deregulation issue as long as necessary and we as members will do our utmost to take those actions necessary to protect our state’s economic interests and our state’s water rights.

Again, thanks for reading and as always feel free to contact me anytime. My home phone is (208) 265-0123 and my mailing address is P.O. Box 112, Dover, 83825. You can also reach me on “E” mail at infocntr(at)lso.state.us.

Thanks for reading!

George

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Rep. George Eskridge Rep. George Eskridge the Republican Representative for District 1 in Idaho’s House, George Eskridge can be reached at 208-265-0123 or write PO Box 112, Dover, ID 83825

Tagged as:

energy, electricity, hydroelectric, deregulation, Bonneville Power Administration

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