< back		 Sharon Nelson, Washington Utilities and Transportation Commission

Nelson is chair of the Washington Utilities and Transportation Commission. She received a bachelor’s degree from Carleton College, a master’s in teaching from the University of Chicago, and a law degree from the University of Washington. She has been a school teacher (1969-1973); staff counsel of U.S. Senate Commerce Committee (1976-78); legislative counsel to Consumers Union of United States (1978-81); private law practice (1982-83); staff coordinator for Joint Select Committee on Telecommunications of the Washington State Legislature (1983-85); assumed chairmanship of the Utility Commission on February 11, 1985, and her current term ends January 1, 1997.
1. What is the best thing about the recommendations? Recommendations on changes to the structure of the industry to encourage effective and beneficial competition represent progress. Recommendations concerning the independent grid operator control of the transmission system and the issues and conditions important for implementation of retail competition fall in this category. While retail competition will be a matter of state and local policy-making, the draft report makes a contribution by raising these issues and conditions for consideration by local decision makers. Competition at the retail level can only be a beneficial improvement on the current system if reliable and affordable service to all consumers is preserved and appropriate consumer protection is provided.
2. What is the most challenging thing about the recommendations? I am less comfortable with the recommendations concerning the marketing of federal power and the preservation of public purposes associated with the electricity industry. In both cases, the draft recommendations seem to be too much focused on forcing past circumstances into the future and too little on solving problems and accomplishing objectives under new competitive circumstances. I am particularly interested in comments and suggestions from the public on how to improve these recommendations.

The recommendations allocate rights to purchase federal power largely to current utilities and the direct service industries. In a more competitive industry, these entities may or may not serve to deliver the benefits and risks of federal power to consumers. Since the region’s consumers should be the ultimate beneficiaries of the region’s electricity system, they, likewise, should bear the obligation to pay a fair price for its past environmental and nuclear program costs and have the opportunity to manage its future risks.

Allocating access to the power system among the current utilities may fail to be a very stable solution and fails to spread access to federal power equitably across all the region’s residential/small farm, commercial, and industrial customers. In addition, the draft does not very well describe the appropriate role for BPA, a federal agency, to play in a competitive commercial market.

In the case of recommendations concerning conservation, renewables, and low income, I am uncomfortable with the lack of a specific recommendation concerning how such important, yet non-market values will be supported in a more competitive market structure. While the recommendation represents a true compromise, it focuses primarily on a level of effort “budget” and the way that budget should be allocated to various functions. I have no strong opinion about whether the budget recommended is appropriate.

I do feel that these matters of basic social equity and long term environmental and economic benefit continue to be important and should be preserved. However, a recommendation focused on an industry-wide pricing structure (e.g., a distribution charge) that could support collection of funds for these purposes would be a better place to start than with a budget. The level of effort found to be appropriate needs to be contributed to equally by all consumers and suppliers in the market. I hope that public comment will help establish the importance of these public values, as well as provide the basis for a recommendation about a consistent industry approach to provide for their support.
3. Why should people care about the recommendations? The next few years will see more change in this region’s electricity industry than we have experienced in decades. Competition in electricity services is here today and will grow in the future. The transition from monopoly service to an industry controlled by the choices of consumers can lead to greater efficiency and both short and long term benefits to all consumers. However, this transition will be difficult and will require careful attention to detail if it is to improve on an electricity system that is crucial to the region’s well being and that already provides reliable services at some of the lowest prices in the country.

The steering committee’s draft recommendations concerning transmission, federal power marketing, public purposes, and retail competition represent substantial progress in some of these areas.