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PHOENIX, AZ -- The Arizona Corporation Commission on August 27 altered the course of deregulation in that state, when the commissioners voted to eliminate the obligation of utilities to divest their generating capacity. The changes were put in motion in December 2001 by a request from Commission Chairman Bill Mundell that the commission undertake a full review of electric competition in light of changes in the marketplace.
"Many of the representations made to the commission by the proponents of deregulation when the original deregulation plans were enacted have proven to be wrong," Mundell explained.
A key provision of Arizona's electric competition plan required Arizona Public Service (APS) and Tucson Electric Power (TEP) to move their power plants into a separate subsidiary or sell them to another unrelated company.
The purpose of the asset transfers was to ensure that the majority of the power necessary to serve Arizona customers was purchased on the wholesale market. Price spikes on the wholesale ...