Michigan Makes Great Strides in Electric Restructuring Study; Pennsylvania, New York Still Lead Nation

WASHINGTON—The states of Michigan, Ohio, West Virginia and Rhode Island have made the greatest strides toward electric restructuring this year, an update of the Retail Energy Deregulation Index 2000 (RED Index) revealed.

The July update to the RED Index, originally issued in February by the Center for the Advancement of Energy Markets (CAEM), also showed that Pennsylvania and New York continue to be nearly tied for the national lead in electric restructuring, while there are signs that California is retreating from its pro-restructuring policy.

The July update showed that:

  • Pennsylvania and New York, with scores of 65 and 64 out of 100, respectively, lead the nation in customer choice.
  • Four state made significant strides, with jumps of more than 20 points since the original study in February 2000: Michigan (RED score 40, RED rank 12); Ohio (RED score 36, RED rank 15); West Virginia (RED score 31, RED rank 19); and Rhode Island (RED score 49, RED rank 8).
  • Texas, a relative newcomer to restructuring, leads the South with a score of 53 and a ranking of fifth in the nation.
  • California, the pioneer in electric restructuring, surprisingly ranks only 16th, with a score of 34.
  • Thirty-five states had either no change or an increase of less than 5 points.
  • The national average score is 21, up from 17 in February.

"The big surprise to us is that so many more states participated in the survey," said Ken Malloy, CAEM president. "When we began the study last year, only 22 states responded to our requests that they review how we classified their state. In the July update, 47 states responded."

"The customer choice model will eventually be implemented in all states," Malloy said. "But there is so much detail involved in 51 jurisdictions moving at different speeds on different issues that we need a user-friendly scorecard to measure each state's progress. The RED Index is the only effort to synthesize the mass of detail into a single number."

The RED Index 2000: July Update is a report that measures the progress states have made in moving from the monopoly model of public utility regulation to the competitive model. A RED Index score of 0 represent the monopoly model and a score of 100 represents complete and effective implementation of the competitive model. The index focuses on retail competition and currently covers only electric restructuring; it will be updated twice a year.

CAEM is an independent, nonprofit think tank whose mission is to promote an effective transition from the monopoly to the competitive model of regulation.

Sponsored by FLSmidth

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