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Electrical deregulation on hold for now

The high-stakes game of deregulating the electrical utility industry appears on hold for now in the Utah Legislature.

A resolution saying as much sailed through a committee and passed the House without a negative vote during the first week of the 1998 general session.But the most telling evidence that lawmakers don't want to touch the volatile topic was the "yes" vote on the resolution from House Majority Leader Christine Fox-Finlinson.

After seeing her political career jeopardized by accusations of her personal life conflicting with her public obligations, the veteran legislator and champion of deregulation said she had had enough.

"I've taken enough cheap shots on this, and I don't want to take any more," said the popular six-term Republican from Lehi.

Few legislators or lobbyists were willing to speak candidly on the record about the politics swirling around the issue, but several spoke on condition of anonymity.

Some characterized Fox-Finlinson's defeat on deregulation as a calculated move by anonymous rivals to short-circuit her aspirations to become the state's first female Speaker of the House.

But others dismiss any cloak-and-dagger political intrigue. They say putting the brakes on electrical deregulation was simply lawmakers wanting more time to digest a complex proposal that would affect the pocketbooks of business and residential rate payers throughout Utah.

"Not everyone is at the comfort level to move ahead," said Senate Majority Whip Leonard Blackham, who along with Fox-Finlinson co-chaired a task force on the issue until controversy forced her to step from that position.

But she remains on the panel that will resume deliberations when the 52nd Legislature recesses. The task force is expected to recommend to lawmakers in 1999 whether to follow the lead of California and a handful of other states to let the free market dictate the electrical industry, or maintain the status quo of strict state regulation of a monopoly.

In an attempt to understand the mind-numbing details of deregulation, the Legislature created the Electrical Deregulation and Customer Choice Task Force last year. Lawmakers also froze Utah Power's rates and put a pending rate case on hold during the task force's investigation.

For six months the 12-member panel of lawmakers - some with ties to the industry - delved into the intricacies of generating, transmitting and distributing electricity.

The hearings involved testimony from Utah Power, state regulators, and customers large and small. The partitioned walls separating hearing rooms in the state Capitol had to be opened to accommodate an audience of paid lobbyists and lawyers hanging on every detail.

"There isn't a lobbyist who isn't tied to this in some way," said Claire Geddes of United We Stand-Utah, Ross Perot's watchdog group that argues for consumers in the deregulation debate.

At the same time, Utah Power and a group of large industrial customers were negotiating a deal that would allow some open-market buying of electricity. The intent was to present it to the task force as a model to endorse.

"They worked hard and they were very close," Fox-Finlinson said. "Some of us would have liked to have seen more."

Yet, Fox-Finlinson soon found herself alone in her zeal to deregulate the industry. She thinks she was sabotaged but won't elaborate on what happened or the possible motives behind it.

The theories range from a calculated effort to hurt Fox-Finlinson's chances of becoming House speaker to punishing an ardent critic of industry regulation.

"I have my ideas, but I don't have evidence to prove it," she said.

Her isolation intensified after somebody leaked to reporters she was dating Fred Finlinson, an attorney at the firm where she also practices law. Finlinson was the negotiator in the deal on behalf of Intermountain Health Care.

The couple married in early January.

Afterwards, committee members said they knew of the conflict, but say publicly it didn't bother them.

"In a citizens' legislature we all have conflicts and the important thing is to be open about them," said House Majority Whip and task force member Kevin Garn.

He and other GOP leaders deny Fox-Finlinson was pressured to step down as co-chair of the panel or that politics were behind publicizing her relationship with Finlinson.

"First of all, I don't know of any political enemies to Christine and I don't think anyone is that devious," said Garn.

Rep. Marty Stephens, the House Republicans' budget chairman, said Speaker Mel Brown's reported intention to run for an unprecedented third term as speaker also discounts any theory that someone seeking the same title used the deregulation issue to take Fox-Finlinson out of the picture.

Garn said Fox-Finlinson simply ended up too far out front and in the minority on an issue others wanted more time to study. He said there were questions others wanted answered about how consumers and city-owned utilities would make out in a free-market environment.

"This task force is pretty astute and pretty independent and will do what they think is right," he said.

Garn and other committee members also said Utah enjoys some of the lowest power rates in the country, so there is no hurry to make changes in hopes of finding cheaper power.

Fox-Finlinson won't explain why she believes anything more than a simple disagreement was responsible for her winding up as the only member of Republican leadership - and just one of two task force members - willing to pursue deregulation this year.

Indeed, deregulation has its share of vocal critics. There was its impact on organized labor, the regulatory community, consumer groups, rural electrical co-ops and other interests, which knowledgeable observers mention as probable culprits in temporarily derailing deregulation.

Representatives from those groups deny any behind-the-scenes maneuvers.

As for the past year's events affecting the political future of Fox-Finlinson?

The 50-year-old attorney and newlywed simply sighs and says: "Well, it didn't help."

Even so, Fox-Finlinson - who took over her husband's seat when he died in 1987 and as a single parent put herself through law school - won't bail out of the deregulation debate.

An outspoken critic of government regulation, she believes business can benefit and consumers can be protected under deregulation.

That is why Fox-Finlinson is keeping her options open on a deregulation bill this session. But she doesn't expect anything more than the current resolution, HJR7, and Blackham's proposal to direct the Public Service Commission to gather data for the task force to consider this year.

Even her husband, a former state senator and savvy utilities lobbyist, said the issue is too complex to force something on the Legislature without the backing of the task force and leadership.

Utah Power spokesman Dave Eskelsen said that while the utility supports deregulation sooner rather than later, it won't force the issue.