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 February 1, 1998

Let’s get the facts first

Facts — the state of things as they are: real, actual, true (fact as distinct from fancy), according to Webster’s New World Dictionary.

The definition is easy, but getting real facts are more difficult. Everyone’s view of the facts is different, especially when it comes to the electric utility industry today.

There is a movement across the country to deregulate our industry. But we don’t have the facts we need to know to determine if this is a good idea or not. Yet, some people would have our Colorado General Assembly, now in session, push ahead with major legislation that would forever change how this vitally important industry is operated. And they want our representatives to make these decisions without getting the facts first.

The Colorado Rural Electric Association wants to stop and look at the facts first. We support legislation that would create a study committee to conduct an impartial evaluation of this important public policy issue.

Colorado is not a state in crisis that demands immediate action. Our rates are not unreasonably high. They are in the middle of the rate range in the western United States.

We are not losing growth because of our electric rates. Colorado is the fifth fastest-growing state in the country. Electricity is a critical ingredient in the state’s present and future economic growth.

We need more facts before we jeopardize this important commodity. For instance, what will be the impact of deregulation on residential customers? I have seen studies that show residential bills will increase $28 per month during the first four years with customer choice being implemented. Is this true?

We need an impartial panel that represents an equitable mix of utilities, consumer groups, and others with a stake in the deregulation issue to look at the facts and make a rational recommendation.

The panel needs to look at questions like what would happen to the tax base of our cities and counties with regards to public utility property in a deregulated environment? One study indicates that as the revenue stream to the utility decreases, so does the tax base.

What about how we would treat stranded costs that may be uneconomical to own and operate in a deregulated environment? It is estimated that stranded costs for Colorado utilities are between $1 billion and $10 billion. How would this be paid? Should it be paid? Should it be paid by the consumer, the shareholder, or should it be washed out of the economy through bankruptcies?

Would Colorado consumers lose their low-cost power? Some of the best economic minds say that the power from low-cost states will flow to high-cost states.

What about the impact of restructuring on reliability and quality? I believe that as utilities focus more on the bottom line, there will be less focus on maintenance.

There are too many questions like these to which we do not have answers. I feel strongly that the electrical industry is too critical to “tinker with” in a 120-day legislative session unless everything is based on a fair, comprehensive and objective study.

Ray E. Clifton is executive director of the Colorado Rural Electric Association.

Facts — the state of things as they are: real, actual, true (fact as distinct from fancy), according to Webster’s New World Dictionary.

The definition is easy, but getting real facts are more difficult. Everyone’s view of the facts is different, especially when it comes to the electric utility industry today.

There is a movement across the country to deregulate our industry. But we don’t have the facts we need to know to determine if this is a good idea or not. Yet, some people would have our…

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