N.C. Stalls Deregulation \Due to Calif. Power Woes

The deadline was set during the last legislative session but can be changed according to the findings of the Future of Electric Services Committee.

Deregulation proponents hope that competition will force power companies to cut costs to provide better, faster and cheaper electricity.

Sen. Walter Dalton, D-Cleveland and member of the study committee, said the problems in California taught state legislators that they needed to find a way to ensure a sufficient supply of electricity.

The core of California's problems lie in the insufficient supply of power in the midst of a growing population.

Because of strict environmental and supply regulations, it has been 10 years since California has seen a new power plant. This put the demand for electricity significantly higher than the amount supplied and consequently left plants bankrupt and many households in the dark.

Dalton said the state would encourage construction of plants to prevent problems similar to those in California but still try to lower consumers' electrical bills.

He said it was also important that North Carolina open up its power grid, allowing power to flow freely around the state. Dalton said state legislators would have to ensure a reliable supply of power for the state before and during the electrical deregulation.

Several other committee members agreed with Dalton. Sen. James Forrester, R--Gaston, a member of the committee, said North Carolina already had an adequate supply of power plants but the committee was right to delay the deregulation. "(The committee) needed to back off and do it right," he said.

But Forrester said legislators should phase the program in five to 10 years.

He said if state legislators loosened some building regulations, they could encourage construction of more power plants and eliminate one of the problems faced in California.

Rep. Edwin McMahan, R-Mecklenburg, said he was considering a bill that would encourage construction of new power-generating plants by reducing regulations.

McMahan said electrical deregulation would be more likely to happen on the state rather than the federal level because President Bush favors local control.

Keith Poston, Carolina Power & Light Co. spokesman, said the committee made the right decision. "California put a chill into deregulation efforts, and the Carolinas (are) no exception," Poston said.

He said the power company was "generally supportive" of electrical deregulation provided that the utilities and consumers were not hurt in the process.

"North Carolina is not in a crisis situation," he said, which would allow the committee time to make the proper decisions.

He said CP&L has increased the capacity of their power plants during the last two years by 2,000 megawatts and will continue additions in the future to meet the increased demand for power.

Despite the difficulties deregulation might face, Forrester said consumers will enjoy better service with lower costs -- like the airline and telephone industries. "Like airlines and telephones, deregulation will take time to do it correctly without harming consumers."