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"Most of the utility companies that have supported Mr. Schaefer are actively working against his bill," says Perino, adding that those companies would contribute to any congressperson with influence over their industry. "This is a subcommittee that's working on an issue they care about."

She says Schaefer is well aware of Lewandowski and his criticism. According to Perino, opponents of deregulation were allowed to speak at Schaefer's hearings, but there wasn't time to accommodate Lewandowski. She believes Lewandowski has turned the issue into a personal vendetta. "He's gone crazy about this," she says. "He's using scare tactics and coming up with stuff that's not true."

Perino says Schaefer simply wants to give homeowners and small businesses the same ability to negotiate for discounts that large users already have. "Times are changing, and we have the opportunity to reduce costs to consumers," she says. "The notion that Coloradans don't stand to benefit is false."

Perino also dismisses the idea that Colorado power would flow to California, hiking prices here. She says new companies would emerge to serve the Colorado market and prices would inevitably drop. "Even Public Service prices will go down, because they'll have to compete," she predicts.

Proponents of deregulation often point to Lakewood-based natural-gas supplier KN Energy as a potential competitor to Public Service for electrical power. That's because technological advances have made it cheaper and cleaner to generate electricity with natural gas than with the coal that's burned in Public Service's network of power plants. But KN isn't making any promises. The fast-growing company is an important supplier of natural gas in the Rocky Mountain region and has made it clear that it wants to compete with Public Service in the retail natural-gas market. But the company has no plans to make the multi-million-dollar investments required to build a massive network of gas-powered electric plants.

"We're not in the electric distribution business at this time," says KN spokesman Mark Stutz. "That's a possibility on down the road." Stutz says his company's involvement in generating electricity has thus far been limited to developing small gas-powered turbines that can produce relatively small amounts of juice. The company is now working on installing such turbines to serve its headquarters building in Lakewood.

Electricity deregulation has garnered support from more than just big businesses looking for the opportunity to bargain for new power sources. Some environmentalists have also endorsed the idea, believing it will allow more people the option of buying power from renewable sources such as wind and solar energy.

"We care about energy efficiency and alternative energy," says Eric Blank, who works on energy issues for the Boulder-based Land and Water Fund of the Rockies. "Public Service has a wind source program, but other than that, they haven't done much."

Blank says that opening up the energy market would allow consumers to select power companies that produce energy in environmentally sensitive ways, even if that power costs more. One such company, Vermont-based Green Mountain Energy Resources, has been marketing power derived from renewable sources to consumers in California. It's still unclear how many Californians will be willing to back up their environmental convictions by paying more for power, but Blank believes the public can give alternative energy a boost by switching companies.

"Something like 70 percent of people in surveys say they'd be willing to pay more for clean power," says Blank. "With a choice, we think people would pick green energy."

With Schaefer's bill stalled for the moment in Congress, it seems the crucial decisions about electricity deregulation will be made at the state level. So far, the Colorado legislature has been skeptical of the idea, with rural lawmakers in particular resisting change. However, Public Service Company's decision to support deregulation could change the political equation when the legislature opens for business next month.

Public Service is working on a proposal it will offer to the legislature early next year. Jim Wexels, the company's manager of government affairs, says details of the company's plan still have to be worked out, but he emphasizes that PSC wants to have the right to sell electricity out of state.

"That's one of the reasons we support moving ahead in Colorado," he says. "California is opening up [to competition] January 1. If we defer this too long, we won't have an opportunity to serve that market."

Wexels says there are still many issues to be settled before Colorado's electricity market can be thrown open to all comers. Foremost is the matter of "stranded assets," an industry term that refers to past infrastructure costs utilities have incurred in building everything from power plants to electric lines. Utility companies say they have a right to be reimbursed for these costs as the market is opened up, and they usually lobby legislators to allow them to pass along those expenses to all utility customers who receive power over their lines--even those who sign up with competitors. "Stranded assets is one of the issues that will need to be addressed," says Wexels.

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Stuart Steers
Contact: Stuart Steers