FTC Requests Comments on Retail Electricity Competition Plans

The Federal Trade Commission today announced that it is seeking information regarding the results to date of different regulatory approaches to the introduction of competition into the retail sale of electricity. The Commission has approved a Federal Register notice, to be published shortly, that contains a series of questions designed to help gather this information. The Commission will produce a report that discusses the advantages and disadvantages associated with different approaches to particular issues and that identifies, if warranted, areas in which additional federal legislative or regulatory action may be desirable.

As detailed in the notice, many states have enacted, and in some cases begun to implement, legislation designed to introduce competition into the retail sale of electricity to encourage lower prices, better service and greater innovation. To date, 24 states and the District of Columbia have set dates when customers will be allowed to choose their electric power supplier. Recently, however, substantial price increases and reliability problems in some areas undergoing this transition have raised questions about the best way this restructuring can be designed to benefit retail customers. In light of recent price increases and reliability problems in California and western states generally, some states have delayed, or are considering delaying, implementation of retail competition plans.

The Chairman of the Energy and Commerce Committee of the United States House of Representatives, W.J. "Billy" Tauzin, and the Chairman of the Subcommittee on Energy and Air Quality, Joe Barton, have requested that the Commission examine various state retail competition programs and describe those features that appear to have resulted in consumer benefits and those that have not yielded consumer benefits. In addition, the Commission has been asked to examine possible jurisdictional limitations on the states' authority to design successful retail competition plans and whether there is a need for federal legislative or regulatory action. To comply with this request, the Commission will update its July 2000 staff report "Competition and Consumer Protection Perspectives on Electric Power Regulatory Reform."

For the updated report, the Commission proposes to examine state plans that allow customers to choose their generation supplier, and state plans with unique approaches to retail electricity competition. The Commission will work with the states to understand the various features of the plans and to gather facts relevant to understanding the market reaction to a particular state's plan.

The Federal Register notice contains additional questions about which the Commission seeks public comment. The Commission seeks comments on features of state retail competition plans that have benefitted consumers and those that have not. The Commission is particularly interested in receiving information about the market response to various provisions of state retail competition plans. It is not necessary to respond to each question for every state.

Written comments in response to the questions in the Federal Register notice are due by April 3, 2001 and will become part of the public record. They may be submitted to: Donald S. Clark, Office of the Secretary, Federal Trade Commission, 600 Pennsylvania Ave., N.W., Washington, D.C. 20580. Submissions should be captioned: "V010003 -- Comments Regarding Retail Energy Competition." Electronic submissions may be sent by e-mail to: "retailelectricity@ftc.gov" and may also be sent on floppy disk, as described in the notice.

The Commission vote to publish the Federal Register notice was 5-0.

Copies are available on the FTC's Web site. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form. The FTC enters Internet, telemarketing and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.