What is Deregulation?

Some call it customer choice, meaning that consumers may choose who supplies their electricity (but not who delivers it to their home or business). Others call it utility deregulation, re-regulation or restructuring.

Whatever you call it, changes in the electric industry are often in the limelight in state and federal politics. To determine the course of deregulation, Klickitat PUD has joined other PUDs in the state in identifying key principles that must be part of any legislative package. Those principles include:

  • All customers must share equitably in the benefits of restructuring and they must be protected from higher rates caused by industry changes. There is the potential for large customers -- large businesses and industries, for instance -- to see lower rates because power suppliers might offer them special deals. There is concern that that might mean higher power rates for smaller power users like small businesses and residences. Washington PUDs want to make sure that all classes of customers share in the benefits of any change.

  • Industry changes must not erode local control of customer-owned utilities. Customer choice created PUDs, nonprofit, customer-owned utilities whose sole purpose is to serve their customers. PUDs believe that their locally-elected commissioners should retain sole authority to set rates and charges, determine each utility's investment in energy resources, issue tax-exempt bonds to finance system improvements and establish utility programs, services and policies.

  • PUDs must have the full authority to provide all types of utility services. City-owned, cooperative and investor-owned utilities have the right to sell electricity, energy services, natural gas and telecommunications. To be competitive, PUDs want to make sure they can provide a similar range of services to their customers.

  • Funding for conservation, renewable resources and low-income assistance (and other "public purposes") should be collected and spent locally. Some have suggested that funding for "public purposes" should be mandated and collected by a regional body. To PUDs that is contrary to their tradition of local determination and local action to meet local needs.

  • Local power distribution systems should be preserved. Even if others are able to sell electricity to PUD customers, the local utility should retain sole responsibility for the local power distribution system. No other entity should be allowed to build new or duplicate facilities within the PUD's territory.

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    Last updated: 12/2009
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