99-10251. Public Workshop: Market Power and Consumer Protection Issues Involved With Encouraging Competition in the U.S. Electric Industry

[Federal Register Volume 64, Number 78 (Friday, April 23, 1999)]
[Notices]
[Pages 20130-20132]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10251]



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Part VI





Federal Trade Commission





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Public Workshop: Market Power and Consumer Protection Issues Involved 
With Encouraging Competition in the U.S. Electric Industry; Notice

Federal Register / Vol. 64, No. 78 / Friday, April 23, 1999 / 
Notices

[[Page 20130]]



FEDERAL TRADE COMMISSION


Public Workshop: Market Power and Consumer Protection Issues 
Involved With Encouraging Competition in the U.S. Electric Industry

AGENCY: Federal Trade Commission.

ACTION: Notice announcing the dates of workshop.

-----------------------------------------------------------------------

SUMMARY: The Federal Trade Commission has set September 13-14, 1999 as 
the dates for its public workshop examining the market power and 
consumer protection issues involved with encouraging competition in the 
U.S. electric industry.

DATES: The workshop will be held September 13 and 14, 1999 in the 
Commission Meeting Room (Room 432), 600 Pennsylvania Ave., N.W., 
Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT: For questions about the workshop, 
contact: Michael Wroblewski, Office of Policy Planning, Federal Trade 
Commission, 600 Pennsylvania Ave., N.W., Washington, D.C. 20580, 
telephone [phone], e-mail [e-mail]; John C. Hilke, 
Bureau of Economics, Federal Trade Commission, 1961 Stout Street, Suite 
1523, Denver, CO 80294-0101, telephone [phone], e-mail 
[e-mail]; Gina Schaar Howard, Bureau of Consumer Protection, 
Federal Trade Commission, 600 Pennsylvania Ave., N.W., Washington, D.C. 
20580, telephone [phone], e-mail [e-mail]; or David Balto, 
Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave., 
N.W., Washington, D.C. 20580, telephone [phone], e-mail 
[e-mail].
    To preregister for the workshop, contact Wendy Givler, National 
Research Regulatory Institute at The Ohio State University, 1080 
Carmack Road, Columbus, Ohio 43210, telephone [phone], e-mail 
[e-mail].

SUPPLEMENTARY INFORMATION:

Retail Electricity: Promise and Progress Workshop

Overview

    In recent years, states and the Federal government have taken steps 
to encourage restructuring and competition in the electricity industry, 
including the elimination of regulatory barriers. The FTC recognizes 
these issues are vast and interrelated and that states could derive 
substantial benefit from sharing ideas and experiences in these areas. 
The FTC seeks to convene a workshop that will allow such idea sharing 
on two topics that bear directly on the FTC's expertise--market power 
(e.g. evaluating and addressing horizontal market power concerns in 
generation) and consumer protection (e.g. disclosures by electric 
service providers of environmental attributes of power they are 
selling). The intent of the workshop is to provide a forum for 
discussing the experience under policies that have been implemented at 
the state level, rather than attempting to provide all of the answers 
to a complex set of issues that vary by region and locale. The FTC 
anticipates that a robust exchange of views and ideas among those 
working on the issues will prove stimulating and useful as the 
regulatory reform process moves forward. To facilitate discussion of 
how states have addressed these two issues, each of the panels in the 
workshop will be moderated by the FTC (or the U.S. Department of 
Justice, Antitrust Division), so that we can gain a better 
understanding of the issues involved and be available as a resource. 
Although there are many other issues that policymakers are considering 
in the electric industry restructuring debate, discussion will focus on 
how states have addressed market power and consumer protection 
concerns.

Workshop Goals

    1. Provide state regulators and state attorneys general a forum in 
which they can describe and discuss present and expected results of 
state regulatory reform efforts in the electric power industry with a 
focus on market power and consumer protection strategies to ensure that 
consumers benefit from regulatory reform.
    2. Provide an opportunity for the Commission and the staff to gain 
a better understanding of the issues involved in the regulatory reform 
process so that we can serve as a resource with respect to market power 
and consumer protection issues.

Registration and Participants

    The workshop will focus on issues of concern to state regulators 
and state attorneys general. State commissioners, attorneys general and 
their staffs from states active in promoting retail electricity 
competition will be invited to participate as panelists as described in 
the following proposed workshop agenda. Suppliers, customers, public 
policy and interest groups and/or representatives from academia that 
have experience with these state efforts also will be invited to 
participate as panelists. Other state commissioners, attorneys general 
and their staff are encouraged and welcome to attend. Electricity 
industry groups, marketers, suppliers and customers are invited to 
attend as well.
    The National Regulatory Research Institute (NRRI) and the National 
Council on Competition and the Electric Industry (NCCEI) are co-
sponsoring the workshop. NRRI will handle registration. To ensure 
space, attendees are encouraged to preregister by September 3, 1999. To 
preregister, contact Wendy Givler, National Research Regulatory 
Institute at The Ohio State University, 1080 Carmack Road, Columbus, 
Ohio 43210, telephone [phone], e-mail [e-mail].

Proposed Workshop Agenda

First Day
    Introduction Address 9 a.m. (15 minutes)--Representatives of the 
sponsoring organizations (FTC, NRRI, and NCCEI) will provide an 
introduction by establishing the framework for the two-day workshop and 
providing an overview concerning the focus of the workshop on market 
power and consumer protection issues involved as states move toward 
retail electricity competition.

Session I: Retail Competition in Pioneer States

Panel A: What Approaches Did Pioneer States take in Promoting Retail 
Electricity Competition?

(9:15 a.m.-10:00 a.m.)
    State policymakers (state commissioners or staff) from pioneer 
states (states active in promoting retail electricity competition) will 
be asked to discuss the approach and structure each state used or is 
using to proceed with electricity restructuring. In order to provide 
guidance and to share experiences with other states considering 
restructuring, each panelist will be asked to provide an assessment of 
the best and worst of his/her state's experience, as well as describe 
the most significant decisions made in restructuring the provision of 
electricity at the retail level Examples of the types of issues 
panelists might raise include:
     The approach and process the state used to address 
regulatory reform and restructuring;
     Types of services (e.g., generation, metering & billing) 
subject to competition;
     Elimination of entry barriers (e.g., streamline of siting 
requirements);
     Effects on consumer choice of various competitive 
transition charges that have been implemented; and
     Consumer education efforts aimed at retail electricity 
competition.

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Break (10:00 a.m.-10:15 a.m.)

Panel B: Assessment of the Results to Date of Pioneer State Reform 
Efforts

(10:15 a.m.-12:00 p.m.)
    Panelists representing suppliers, customers, public policy and 
interest groups and/or academia will be asked to assess the positive 
and negative results of state retail electricity restructuring efforts, 
and the reasons therefor, with an emphasis on:
     Types of products and services that have been offered in 
the states where retail competition has been implemented;
     Percentage of industrial, commercial and residential 
customers switching to new service providers; and
     Electricity pricing trends for industrial, commercial and 
residential customers in a deregulated environment.
Lunch Break (12:00 p.m.-1:15 p.m.)

Session II: Existing Market Power in Retail Markets

Panel A: How Have States Addressed Existing Market Power?

(1:15 p.m.-2:15 p.m.)
    Panelists (state attorneys general, commissioners or staff) will be 
asked to discuss how each state addressed existing market power of 
incumbent utilities, if any.
     Approaches states have taken with respect to evaluating 
and addressing concerns about horizontal market power (in the 
generation sector) of incumbent utilities (e.g., divestiture, ISOs).
     Approaches states have taken with respect to evaluating 
and addressing vertical discrimination and cross-subsidization (e.g., 
use of ISOs, divestiture, codes of conduct).
Break (2:15 p.m.-2:30 p.m.)

Panel B: Assessment of State Efforts to Address Existing Market Power

(2:30 p.m.-3:45 p.m.)
    Panelists representing suppliers, customers, public policy and 
interest groups and/or academia will be asked to discuss the positive 
and negative results of state efforts to evaluate and address existing 
market power, if any, held by incumbent utilities. FTC staff also will 
assist in this discussion by presenting possible approaches to address 
and remedy market power by:
     Applying the factors in the DOJ/FTC Horizontal Merger 
Guidelines to assess existing market power (horizontal);
     Considering alternative future scenarios based upon 
different possible remedies;
     Providing access to the information necessary for an 
appropriate analysis;
     Using computer simulations to assess market power.
Break (3:45 p.m.-4:00 p.m.)

Session III: How Does Wholesale Competition for Generation Affect 
Retail Electricity Competition?

(4:00 p.m.-5:30 p.m.)
    Panelists (federal policymakers, academics, or representatives from 
public policy groups) will be asked to discuss the links between 
wholesale competition and retail competition and whether competitive 
wholesale generation electricity markets are necessary for competition 
to emerge at the retail level. The topics will include:
     Consideration of regional transmission organizations;
     Use of new technologies (distributed generation) that 
facilitate entry;
     Congestion pricing through locational marginal pricing and 
the use of firm transmission rights;
     Role of North American Electric Reliability Council (NERC) 
and reliability monitoring; and
     Implications of the wholesale price spikes of the past 
year for prospective retail electricity competition.
Second Day

Session IV: Affiliate Rules or Codes of Conduct

Panel A: How Have States Developed Affiliate Rules or Codes of Conduct?

(9:00 a.m.-10:00 a.m.)
    Panelists (state attorneys general, commissioners or staff) will be 
asked to discuss how each state has used affiliate rules or codes of 
conduct to remedy problems posed by incumbent utilities' market power 
and to prevent deceptive practices. Topics of discussion will include:
    Types of affiliate entities created by utilities for unregulated 
activities;
     The potential for cross-subsidization between a utility 
and its affiliates, including controls to avoid cross-subsidization;
     Unregulated affiliates' use of incumbent utilities' names/
logos--varieties of use and possibility for consumer confusion; and
     Remedies to avoid consumer deception regarding the 
relationship between the incumbent utility and the affiliate--
disclosures regarding the relationship versus a ban on use of the 
utility name and logo by the affiliate.
Break (10:00 a.m.-10:15 a.m.)

Panel B: Assessment of State Use of Affiliate Rules or Codes of Conduct

(10:15 a.m.-12:00 p.m.)
    Panelists representing suppliers, customers, public policy and 
interest groups and/or academia will be asked to assess the positive 
and negative results of state use of affiliate rules or codes of 
conduct with an emphasis on:
     Effect (enhancement vs. inhibition) on competition;
     Consumer expectations and reactions; and
     Relationship between these rules and the offering and 
pricing of new/innovative products.
Lunch Break (12:00 p.m.-1:30 p.m.)

Session V: Advertising and disclosures of Environmental Attributes 
and Price

(1:30 p.m.-3:00 p.m.)
    Panelists (state attorneys general, commissioners, public policy 
and interest groups, or industry consultants) will be asked to discuss 
the trends in advertising environmental claims, labeling requirements, 
and tracking systems. FTC staff would lead off with a summary of its 
Green Guide comment to the National Association of Attorneys General 
(NAAG).
     Description of existing remedies for deceptive claims--
jurisdiction (i.e., attorneys general, state commissions, or both); 
whether these remedies are sufficient or whether new legal authority is 
needed; need for additional industry guidance from regulators (e.g., 
Electricity Green Guides).
     Mandated disclosure of information--current requirements; 
effect on consumers and the market; relationship to advertising.
     Verification or auditing of company-supplied information--
state experience thus far.
     Issues with systems for tracking fuel mix--cost; 
prevention of ``double counting'' of a fuel source; substantiation that 
a product has not been ``double counted''; the Western states' current 
views and plans on using a ``tradable tags'' system.
Break (3:00 p.m.-3:15 p.m.)

Session VI: Supplier Practices in a Retail Environment

(3:15 p.m.-4:45 p.m.)
    Panelists (state attorneys general, commissioners, public policy 
and interest groups, or industry consultants) will be asked to discuss 
existing legislation/regulations on slamming/cramming issues, 
licensing/bonding of

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service providers and credit and billing practices of service 
providers.
     Slamming and cramming--extent of problem; adequacy of 
existing remedies; preventing fraud without creating unnecessary 
barriers to entry or legitimate innovative marketing techniques.
     Licensing and bonding--deterring unscrupulous competitors 
without discouraging legitimate new entrants; protecting incumbent 
utilities vs. protecting consumers.
     Credit laws and regulations--applicability of Truth in 
Lending Act (TILA), Equal Credit Opportunity Act (ECOA), etc. to 
suppliers and utilities under various billing schemes; consumer privacy 
concerns arising from exchange of account information for switching or 
billing purposes; account information access and sharing between 
utilities and suppliers.

    Authority: 15 U.S.C. 41 et seq.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 99-10251 Filed 4-22-99; 8:45 am]
BILLING CODE 6750-01-P