State lawmakers aim to inject competition in vertically integrated utilities

Bills to add competitive market features for vertically integrated utilities have reached committee debates during spring legislative sessions in several states, with pushback from investor-owned utilities.

Measures in Indiana, Missouri, South Carolina, West Virginia and a few other states may not gain passage as currently crafted, but they show that state lawmakers are “digging deep on energy issues” to try and provide relief for constituents concerned with higher power costs, said Kent Chandler, resident senior fellow for energy and environmental policy at the R Street Institute.

Legislation that would enable competitive generation additions or full retail choice in traditional monopoly utility states is not surprising to Chandler, who previously served on the Kentucky Public Service Commission and as a utility consumer advocate in the state. Consumers want protection against paying for bad utility decisions, particularly when seeing higher power costs and becoming concerned about utility investments for load forecasts tied to data centers that are not ultimately developed, said Chandler during a March 16 interview.

Among the bills R Street is tracking are S.B. 272 and H.B. 1276 in Indiana, S.B. 867 and S.B. 878 in South Carolina, H.B. 5657 and S.B. 733 in West Virginia, and H.B. 2207 and S.B. 1411 in Missouri. A South Carolina bill, S.B. 867, would allow retail choice for large commercial and industrial customers in the state, where utility customers are paying for a huge nuclear power cost overrun for reactors that were not built.