FOR IMMEDIATE RELEASE

January 11, 2001

CUSTOMERS FIRST! COALITION PROPOSES PLAN TO KEEP THE LIGHTS ON IN WISCONSIN

MADISON – The Customers First! Coalition (CFC) today called on state regulators to take decisive action to prevent Wisconsin’s electric industry from stumbling into the same deregulation quagmire currently holding California’s power markets captive and threatening the livelihood of that state’s economy.

CFC filed a Generation Action Plan with the state Public Service Commission that would ensure reliable and affordable electricity in Wisconsin by encouraging the construction of much-needed new generation capacity that would remain under the state’s jurisdiction.

"There’s no question Wisconsin needs more generation," said Roy Thilly, President and CEO of Wisconsin Public Power Inc. "Decisions about the availability of electricity are decisions about the economic health of the state and its citizens."

"The Customers First! plan provides a blueprint for how we get much-needed power in Wisconsin – without delay and without creating unacceptable risks for customers or utilities," added Jason Kay, Government Affairs Representative for AARP.

The CFC plan aims to protect customers from volatile electricity prices and supply shortages, while creating economic incentives to encourage the construction of new power plants in Wisconsin.

"The real selling point for this plan is that it gives the PSC an option for spurring the construction of new power plants that would clearly be within its jurisdiction," said Brian Rude, Director of External Relations at Dairyland Power Cooperative. "Our plan offers a way to get generation built quickly within the existing regulatory framework."

Recently, two Wisconsin investor-owned utilities, Wisconsin Energy and Wisconsin Public Service Corp., filed separate proposals with the PSC that would effectively deregulate the state’s utility industry, transfer regulatory power from the state to Washington, D.C., and require time-consuming changes to state law.

"Both of those plans are recipes for delay," said Lee Cullen, Attorney for Customers First!. "They require controversial legislative changes that would serve as a radical shift in the regulatory agreement between public utilities and their customers. Wisconsin needs an immediate solution to the immediate problem of insufficient electric supply."

The CFC plan encourages the construction of new power plants by both Wisconsin utilities and by independent power producers.

"The incumbent utilities have valuable advantages, like existing brown-field sites and unique knowledge about how to get things done in Wisconsin," said Dave Benforado, Executive Director of the Municipal Electric Utilities of Wisconsin. "At the same time, we also want to ensure a more competitive market for electricity in the state by finding ways to bring in more outside producers."

The CFC plan is also intended to prevent Wisconsin from following California’s example of failed deregulation. California deregulated at a time when the state faced a power supply shortage and limited import capacity – an infrastructure situation similar to Wisconsin. The experiment has been an unmitigated disaster, prompting one utility commissioner in that state to declare deregulation "dead."

"If Wisconsin ever hopes to achieve a real competitive market for electricity, we have to deal with infrastructure improvements first," said Brian Rude. "Only after we have successfully dealt with that issue should we consider regulatory changes."

"In California," added Lee Cullen, "they took a backward approach: deregulate – then cope with infrastructure needs. It’s pretty clear that theirs is not a model Wisconsin should follow."

For further information, please contact:

Chris Tackett, President & CEO
Wisconsin Merchants Federation
(608) 257-3541