Goal: A competitive electric market that offers customers choice and lower prices: A LEVEL PLAYING FIELD.

What Is Needed:

• Competitive cost structures
• Minimize total of competition transition charge (CTC)
• No cost shifting by distribution utilities
  • From generation to transmission or distribution
  • Between affiliates
  • To new market entrants
• Costs that utilities will no longer incur need to be taken out of price structure to create margin of opportunity for new entrants

Level playing field can only be created by:

1. Unbundling the distribution costs so the IOUs do not automatically pass through their overhead, marketing and profits.

2. Providing a competitive transition credit to new entrants to encourage competition.

3. Offering customers incentives for switching to new entrants, as in New Hampshire.

(1) IOU's billing cost for generation is a one-line addition to its distribution bill, thus very low cost.

(2) New entrant's cost does not include overhead, marketing and other costs, much of which the IOU is recovering in the distribution charge.

A level playing field could be created by following the telecommunications model. The new entrant will bill the customer for the total power costs, including generation, trasnsmission, and distribution. The new entrant will then remit distribution and transmission costs to the IOU. The customer will get one invoice; the IOU distribution costs will be only the distribution and maintenance of power.