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City tells the state: Don�t deregulate By Jessica Smith The Medford City Council sent a message to the Oregon Legislature Thursday night � don�t deregulate the state�s power utilities. With a unanimous vote, the council Thursday approved a resolution urging a five-year delay or outright repeal of Oregon�s deregulation legislation, SB1149. "We�re sending a message. I hope they hear it," said Councilman Sal Esquivel, who joined others when he voiced concern over the effect deregulation would have on Medford power consumers, particularly low-income families and the elderly. The vote Thursday followed a study session where the council learned about SB1149 and the future of power utilities locally and statewide. Two bills have been introduced in the Senate to either repeal SB1149 in whole or part. It appears unlikely, however, that either bill would make it to the Senate or House floors. As it stands, SB1149 goes into effect Oct. 1. Among other things, it creates a 3 percent charge on power bills to fund low-income energy assistance and other public projects, gives residential customers several options for their power rate structure, and larger businesses will be able to shop around for the best electricity deals from energy suppliers. But what makes power deregulation attractive � increased competition and better service for consumers � has been overshadowed recently by significant increases in cost. Pacific Power, which supplies electricity to most of the Rogue Valley, including Medford, estimates its residential customers will see a 14.9 percent increase later this year. That�s after a 3 percent increase this week. Monte Mendenhall, regional manager for Pacific Power, said the rate increases will come with or without deregulation. "It�s not associated with deregulation," he told the council during the study session. "It�s associated with rising costs." Also part of the problem is the fact there�s not enough power to meet demands, Mendenhall said. Deregulation might encourage more utilities to invest more in power generation to keep consumer costs down, he added. Several council members referred Thursday to the power crisis in California, saying they don�t want Oregon to end up in the same place. "It appears to me (given California�s situation) that Oregon should take a very slow approach to this," said Councilman Jim Key. Aside from rising costs for residential and business consumers, the council acknowledged that deregulation could have a serious impact on the city�s budget. According to Jef Faw, the city�s finance director, if SB1149 goes into effect, Medford�s electrical costs are expected to increase $420,000 in the 2002-2003 fiscal biennium. The city now spends about $650,000 on power, he said. Reach reporter Jessica Smith at 776-4481, or e-mail [email protected] Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.