PacifiCorp has proposed a company realignment that would create individual state electric companies, a generation company and a service company.
The goal, according to PacifiCorp President and CEO Alan Richardson, is to shield individual state's customers from power troubles elsewhere.
The company has about 642,000 customers in Utah among its 1.5 million customers in the West. It operates as Utah Power in Utah.
"The most important thing is it allows states to go at their pace and follow their own plans," Richardson said Tuesday. "This allows Utah to shape its own customer destiny more than the current arrangement. It means Utah will be able to focus much more on the Utah issues and worry less about the impact of other states on Utah."
Deregulation in Oregon, set for larger power customers next year, has been under the watchful eye of legislative leaders charting a course for Utah's power deregulation. And California's deregulation has come under fire for being ineffective during the summer when power bills skyrocketed due to increased demand and limited supply.
"We're trying to ensure that we protect customers going forward with all the changes," Richardson said. "We don't want a California experience in Utah."
PacifiCorp filed documents earlier this month in five of the six Western states that form the company's service territory. The proposed individual state electric companies, a generation company and a service company all would be owned by a nonoperating U.S. holding company and remain part of the ScottishPower group.
The company also has filed documents with the Federal Energy Regulatory Commission to have the company's transmission controlled by a regional transmission organization, RTO West. PacifiCorp would retain ownership of its existing transmission assets.
Richardson said the regional transmission organization is desirable due to improved reliability.
Getting the needed approvals on the realignment could take more than a year, he said.
"This is something we've been working on during the summer, before the power prices started to rise, but we recognized that if we were not careful, regulation could be very difficult to manage, from a regulator's point of view," Richardson said.
If the plan becomes reality, it will lead to increased investment in power generation plants, something regulators and power companies agree is needed.
Under the plan, five of the state electric companies would have long-term contracts for power with the generation company.
The state electric companies would be subject to state jurisdiction. The generation company would be regulated by the Federal Energy Regulatory Commission, which also regulates transmission. The service company would be regulated by the Securities and Exchange Commission.
The company said the proposal is not expected to lead to work force reductions beyond the company's previously announced transition plan.
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