Oklahoma is working hard to prove it’s not California-at least where electricity is concerned. Two recent conferences remained in the shadow of California’s summer problems, however, while attempting to show Oklahoma stepping forward into electricity’s future.
The “33rd Annual Frontiers of Power Conference” on the Oklahoma State University campus in Stillwater covered engineering and new power developments in the energy arena (but they still began with a statement disassociating the midwestern state with its West Coast counterpart). On the other hand, the National Energy-Environment Law & Policy Institute’s (NELPI) conference dealt specifically with the effects of deregulation on the state.
Like many other states teetering on the verge of deregulation, Oklahoma is asking, “Will we be another California?” And no one plans on moving forward until that question is thoroughly and completely answered.
Both conferences had to position themselves in relation to the PR nightmare that was this summer in the sunshine state. While Frontiers of Power gathered mostly engineers and scientists and Electric Power Deregulation saw a wide array of lawyers and state representatives, the need to predict the effects of restructuring on the state remained the same.
While most Oklahomans embroiled in either the industry itself or the revolving door of legislation do see deregulation in the immediate future, the dilemma remains, however, about whether “immediate” will actually be before the 2002 deadline established by the Electric Restructuring Act of 1997.
While speaking to a room of representatives and lawyers at NELPI’s conference on deregulation, Kevin Easley, state senator and co-author of the now defunct deregulation SB220, didn’t see much current action in the restructuring arena.
“I’m not sure that there will be a new piece of legislation next year,” he told attendees.
Pointing out that the sunshine state’s problems are reflecting on restructuring attempts in “Native America,” Easley stated that the deregulation hot potato may not find a new proponent willing to take the scalding.
“There aren’t a lot of senators who even want to look at this at all,” he said. “You become a target.”
And Easley should know. His 180-page bill, rejected the last day of legislative session this year, took years to put together. While SB220 was, in fact, passed by the Oklahoma Senate on a 30-18 margin, it failed in the Oklahoma House by 56-41, with a mere 15 votes deciding its fate. And Easley took the brunt of the blame, although differing sources cited specific problems with the taxation issue or the sheer length-questions he faced again at the NELPI conference.
Easley reflected that, when he started the process in the mid-1990s, “you couldn’t get five people in a room to discuss it,” but the November conference on deregulation had him looking out over a sea of faces.
“If nothing else has happened, at least we’ve expanded our involvement,” he added.
“In some states, like California, this [deregulation] has been an economic experiment,” stated Tom Shroedter, a legal representative of the Oklahoma Industrial Energy Consumers (OIEC), although he quickly pointed out that his organization fully supports both deregulation and competition. Citing that “the devil is in the details,” he responded that the OIEC didn’t agree with Easley’s SB220.
“We didn’t think Senate Bill 220 did it right,” Schroedter told the same conference attendees. “We think it was an economic experiment,” he added, drawing a parallel to California.
We are no California
Glenn Files, senior vice president of distribution at American Electric Power (AEP), wanted to reassure conference representatives at Frontiers of Power, that California’s errors will not be repeated in their state.
“What will hopefully become more and more clear,” he stated in his keynote address, “is that Oklahoma is not California.”
Among those California errors is the oft-repeated statement that the state has seen no signs of significant new generation for 10 years, and it has long suffered from an out-of-whack supply and demand situation. Files pointed to Oklahoma’s generation-which is now in excess of its demand-as the first major difference between the two. He added that more than 20 power plants have announced intentions to locate in Oklahoma, and a few are already in the construction process.
However, Lee Paden, an attorney addressing the NELPI conference drew a closer generation parallel. He pointed out that, until April of this year, the last major electric facility in Oklahoma came online in 1986-so the idea that demand could exceed supply can’t be instantly dismissed for the state. While he admitted that Oklahoma does generate more energy than it currently uses, he called upon legislators to take the path toward deregulation at a cautious rate.
Encouraging even more generation and transmission upgrades seemed to be the common buzz at the NELPI gathering. Neither industry executive nor government representative foresaw a moratorium on deregulation. On the contrary, they predicted a rosy future for competition in the state, leading to many happy returns.
“Competition drove technological revolutions in telecommunications,” pointed out federal representative Steve Largent holding aloft his cell phone and Palm Pilot. “Competition will bring that to electricity.”
Not everyone is as excited about deregulation though, and not everyone is quite so willing to be persuaded. At the end of Largent’s speech about creating a “level playing field” and encouraging transmission upgrades, he concluded that competition-and by association restructuring-would promote the general welfare of the state. A consumer advocate representative at the back of the room, who remained unconvinced by the parade of industry-related speeches and representative viewpoints, quickly countered this.
“The way that general welfare is promoted is through regulation,” he scolded Largent.