[Congressional Record Volume 144, Number 85 (Thursday, June 25, 1998)]
[Senate]
[Pages S7163-S7164]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                ARIZONA'S ELECTRIC POWER COMPETITION ACT

  Mr. KYL. Mr. President, I rise today as a member of the Senate Energy 
and Natural Resources Committee to call attention to newly enacted 
legislation in my state of Arizona that stands as a model for opening 
electric power markets to competition and customer choice.
  Under the Electric Power Competition Act signed into law May 29 by 
Arizona Governor Jane D. Hull, Arizona's public power utilities must 
open 20 percent of their markets to competition

[[Page S7164]]

by December 31 of this year and 100 percent to competition by December 
31, 2000.
  Residents, businesses, and multi-national corporations served by 
companies like the Salt River Project, a public power and water utility 
serving 670,000 customers in the greater Phoenix area, will gain more 
control over where they spend their energy dollars. Customers will be 
able to shop for savings among sources of electricity, ultimately 
choose billing and metering providers, and still depend on their local 
utility to provide reliable electric delivery and power backup 
services.
  The Arizona legislation requires affected utilities to reduce rates 
for smaller customers at least 10 percent, as measured over a 10-year 
period, and caps rates for larger customers who choose to stay with 
their local utility. To protect consumers against deceptive marketing 
practices, power marketers can enroll customers only through written, 
signed contracts--a provision specifically aimed at stopping the 
notorious ``slamming'' and ``cramming'' abuses that have occurred with 
telephone deregulation. Strict enforcement measures are included for 
companies that fail to comply. The legislation also mandates that 
Arizona public utilities develop and pay for comprehensive public 
education programs to inform customers about their choices.
  While the new law does not apply to investor-owned utilities under 
jurisdiction of the Arizona Corporation Commission, it creates a 
relatively uncomplicated means for opening Arizona's entire electric 
market to competition. It will encourage the transition from monopoly 
to competitive services within a reasonable timeframe, and will allow 
utilities to recover costs of past investments made to meet growth 
needs, but that could become ``stranded'' in a competitive market.
  Improved services, economic efficiencies and new technologies should 
be among outcomes. At the same time, the legislation offers Arizona 
electric customers and suppliers a far less burdensome way of achieving 
choice than the costly plan adopted by California with effects that, so 
far, have slowed the development of competition. By contrast, Arizona's 
legislation strikes a balance between benefits stemming from free 
markets and the public interest in maintaining an economically secure, 
environmentally responsible electric infrastructure.
  Arizona's Electric Power Competition Act was passed with support of 
major industries, consumer groups, low-income advocates, and the 
state's largest investor-owned utility, Arizona Public Service Company. 
It puts Arizona in the forefront of the nation's move to electric 
competition and establishes a policy that other states would do well to 
consider.

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