The more legislators talk about deregulating parts of Utah's electrical industry, the more confusing the issue gets.
Or so it seemed last week, as members of the Legislature's Electrical Deregulation and Customer Choice Task Force tried to understand "unbundling."The concept seems simple enough. According to a Utah Public Service Commission report, unbundling means separately pricing and selling all of the services that make up today's "bundled" electricity service.
Bundling means your electric bill basically has one number on it, representing the amount you have to pay. With unbundling, your bill could show separate costs for different categories of services, like power generation, transmission and distribution.
PSC Chairman Steve Mecham told legislators unbundling will be essential if the state wants to deregulate, or restructure, the in-dus-try.
Currently, most electrical utilities operate as monopolies under strict state regulation. Almost every state is considering restructuring, which would let free-market forces shape the prices for some services.
Mecham said unbundling should let consumers choose exactly which electrical services they want to buy from competing providers. Ideally, unbundling would result in lower prices and better service, he said.
However, Mecham admitted, "Unbundling is not as simple as some of us thought it would be going in."
Not all parties agree on what services should be unbundled, he said. They may also disagree on which items, once unbundled, should be thrown into the open market.
Finally, there is the issue of confusing the consumer. Large industrial power users may be willing to pore over a long list of services and bargain for the best deal on each item, but the average residential or small-business customer may struggle with that opportunity.
Doug Larson, Utah Power's director of regulatory policy for Utah, Idaho and Wyoming, said unbundling will be complex and difficult, but that should not stop the process.
PacifiCorp, Utah Power's parent company, is in the process of a rate case for Utah, and parts of that case may answer some unbundling questions, Larson said. In addition, Utah can learn from the experiences of other states.
Richard Anderson, senior associate with Energy Strategies Inc., said industrial users would like the opportunity to put together portfolios of electrical services that meet their specific needs.
"We've always had the problem of one package, one deal fits all . . .," Anderson said. "Industrial needs are not all the same."
But Nancy Kelly, an economist with the state's Committee of Consumer Services, said it does not believe any electrical services should be unbundled at this time.
"If you unbundle, you've restructured," Kelly said. "What this would do is it would shift costs to small customers. . . . We do not see the forces that will lead to lower prices."
Claire Geddes, Utah director for United We Stand America, said deregulation may sound good in theory, but it might not translate into reality.