Restructuring topic of Public Utility Alliance conference

by Karen E. Culp

SBJ Staff

Springfield will get some powerful visitors Sept. 29.

The first Missouri Public Utility Alliance conference will be Sept. 29-Oct. 1 at Holiday Inn University Plaza in Springfield.

The meeting of public power players falls during the normal time frame for a meeting of the Missouri Association of Municipal Utilities, said Duane Galloway, who serves as president of the MAMU trade association and is senior manager for governmental relations and environmental affairs for City Utilities.

MAMU consolidated with the state's electric and gas commissions to form the public utility alliance, thereby encapsulating all the interests of public power purveyors into one conference, Galloway said.

"In the past, MAMU has had its own annual meetings and has had them since the 1930s, but we formed this umbrella organization last year so that these three interests could come together," Galloway said.

The conference will have an attendance of about 200 and will feature speakers from neighboring states and Washington, D.C.

"It's really open to everyone who has an interest in or supports the concept of public power," Galloway said.

A big portion of the conference will concern restructuring of the electric industry and how public utilities like CU will fit into a restructured market in Missouri.

Larry Watson, who is general manager of a public utility in Paragould, Ark., will speak on Arkansas' experience with legislation that restructures its electric market. That state will begin restructuring Jan. 1, 2002, Watson said.

He was active in 15 months of negotiation with legislators over the restructuring bill that ultimately passed.

"In that time, (public utilities) went from rags to some pretty nice clothing. I won't say riches, necessarily. Our bill gives municipals the right to opt in or opt out of restructuring. If we stay out, nobody can come into our service area and compete, but we can't go anywhere else for new customers, either," Watson said.

Watson said his company will opt in to competition, because he fears stagnation for his community and its power company if it chooses to opt out.

"We're used to the idea of competition by now, and we've been preparing all along for it. Without competition, you're not going to attract new industry," Watson said.

John Twitty, deputy general manager at CU and a keynote speaker at the conference, agreed that opting in was the best choice for the long term for most municipal utilities.

"To opt out is really somewhat short-sighted and not looking toward growth. It is perhaps a way of keeping things the way they are for the short term, but it's not going to be good for the long term," Twitty said.

Most of the restructuring bills passed in individual states have some opt-in, opt-out language for public power, said David Penn, deputy executive director of the American Public Power Association, a Washington, D.C.-based trade group. Penn will also speak at the conference. He said 22 states have some sort of restructuring bill.

Activity will probably continue on the state level, Penn said, since it is unlikely that Congress will enact any restructuring legislation this session.

"There was a contingent of large power users who wanted Congress to enact restructuring legislation on the national level, rather than waiting for state-by-state action, but at this point it looks unlikely that anything will move through this session," Penn said.

Missouri's steady, wait-and-research approach to restructuring is a good one, Penn said, adding that the states who have fared the best have used such methods.

"I point to Colorado as an example of a state that has really stepped back and gathered information to glean out both the positive and the negative," Penn said.

Watson said he has observed Missouri's position for some time, and has been surprised that municipal utilities haven't "had quite the muscle I would have thought they would.

"I don't think municipals have had as strong a voice in the legislature, especially with the actions on telecommunications of a few years ago. We were shut out of the activity at first but we worked our way in," Watson said.

Missouri does not yet have an electric industry restructuring law, but will likely will have a restructuring law by 2002, Galloway said.