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(Craven C5).

Fuel cells making electricity and water, micro-turbines using natural gas,

photovoltaic cells and energy storage systems which allow people to obtain

electricity from the sun may allow people to isolate or remove themselves

from the electric power grid. They may also connect with their neighbors

and other businesses to create similar synergies that utilities obtained by

interconnecting their transmission systems (Washington Post H04). With the

flourishing of smart electronic technologies used for communications,

monitoring, and energy efficiency, this scenario becomes more feasible

(Williams 22). We may see this in the near future.

More than any other topic raised during the electricity deregulation debate,

the stranded cost issue has the potential to sink the entire reform effort.

This does not have to be the main issue (Craven C5). Calls for stranded

cost compensation are unjustified. There is no evidence supporting the

thought that a literal "regulatory compact or contract" of any sort exists

to justify a multibillion-dollar bailout of utilities. The world will not

end if stranded cost recovery is limited or denied. New firms will come up

to provide the service in place of the few utilities that might fail.

Entrepreneurism and innovation will be shown in an environment free of the

monopolistic methods of the past. Customers, who for so long have been

forced to pay the high costs associated with inefficient and uncompetitive

markets, finally will be given the choice to shop for electricity as they

would any other commodity in the free market (Kuttner A21).

In the end, however, the federal role in this process by necessity must be

somewhat constrained. They can’t have the power to change the whole system

themselves. Although Congress rightly can exercise its constitutional

authority to protect the public interest in the free, unhampered flow of

interstate commerce, it cannot prevent the states from determining how much,

if any, compensation is appropriate. Federal legislators should encourage

the states to proceed cautiously, with the interests of every American

consumer in mind as they examine the claims made by their in-state utilities

for compensation with the interest. This compensation would be given at the

expense of a competitive future. Congress should not shy away from

exercising its authority under the Commerce Clause to ensure that

state-by-state stranded cost determinations will not prohibit the

development of a competitive national marketplace. By working together,

federal and state regulators can ensure that the stranded cost recovery

process will not become an obstacle to the free market future for

electricity.

"A Primer on How to Deal with the Power of Choice." Washington Post 17

October 1999: H04.

Craven, Eric. "Educating consumers about utility deregulation and

purchasing." Kansas City Star 12 March 1998: C5.

Deregulation. Computer Software. Microsoft Encarta. Microsoft. 1998.

Eastern Maine Electric Co-op. "www.emec.com/deregulation" Internet source.

1997.

Electric Potential Inc. "http://www.electric-potential.com" Internet

source. 1996.

Gendy, Matthew. "Deregulation in America: Positive?" Newsweek 17

November 1995: 47-53.

Johnson, Nick. "U.S. and International Deregulation." U.S. News and World

Report 4 August 1995: 34-36.

Kuttner, Robert. "Is This an Age of Deregulation of Reregulation?"

Washington Post 2 November 1999: A21

Williams, Terry. "Electric Deregulation." Time 23 April 1996: 21-27.

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