Regulation Policy

President Offers Electricity Deregulation Plan

National legislation to deregulate the nation's electric power industry has been stalled in Congress so far, but some states have enacted their own plans. Now the Clinton administration is offering its proposal, in the form of an approximately 80-page outline rather than a bill.

Under the Clinton proposal:

  • States would be required by a certain date to decide whether to let consumers shop among competing suppliers for their own electric power, or to opt out of the new system.

  • States that already have deregulated would be grandfathered in and allowed to maintain the structures they have created.

  • A $3 billion "public benefits fund" -- financed by a one-tenth of a cent surcharge per kilowatt-hour of electricity sold -- would be created to match state spending for research and development in renewable energy and energy efficiency, and for assistance to low-income consumers.

  • A system would be created to set limits on emissions of nitrogen oxides, allow power companies to trade emissions credits and require power sellers to include renewable energy in their portfolios.

Furthermore, Clinton's proposal would require power sellers to obtain 5.5 percent of their power from renewable sources. A renewable credit system would also be set up to allow a company that couldn't produce power from a renewable source at a reasonable price to buy credits for renewables from a source -- such as a West Texas wind farm -- that could.

Source: Martha M. Hamilton, "Clinton to Offer Plan in Electricity Debate," Washington Post, March 25, 1998.

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