Arlen K. Bolstad, Esq., Senior Attorney
Division of Legislative Services
Subcommittee Studying Electric Utility Restructuring

Dear Mr. Bolstad:

The draft legislation in its current four pieces with references to the various decision trees, SB 688, and the State Corporation Commission's legislative proposal and subsequent addendum letter together with the short time frame for response, makes it difficult for the American Association for Retired Persons (AARP) to respond with the confidence that it has addressed all the issues on which we have concern. There- fore, we request that all interested parties be given an opportunity to comment on a complete draft prior to the January 14, 1999 meeting of the full subcommittee.

There are several comments that we do wish to make at this time.

1. Definitions to be placed in this statute are critical. Among the most critical will be the definition of "affiliate." This should be defined as a separate entity from the incumbent utility and not just a functional bookkeeping separation.

2. Our understanding of the rate cap is that during the transition to effective competition rates for all classes of consumers would be capped as a bundled rate with a "sub-rate" cap for generation services. Under a cap, the rates could not be exceeded but could be reduced. If such a reduction becomes available to one class of consumer, it should be available to all classes. For example, should stranded costs change as a result of increased stranded benefits or a "true up" provision, then all classes should benefit.

3. Another definition that AARP believes that the Legislature should determine is "effective competition." The criteria for effective com- petition should be set in statute.

4. AARP believes the Legislative Transition Task force should include in its items to be studied the concept of "life line" service. This is different from energy assistance programs for low-income house- holds. The SCC studied this issue approximately three years ago and decided not to take any action. That decision may have been appropriate in a monopolistic market, but should be studied again for its viability in a competitive market.

Thank you for this opportunity to comment on the draft documents and we again request the opportunity to comment on a full integrated draft prior to the January 14, 1999 meeting of the full Subcommittee.

Sincerely yours,

William L. Lukhard, Vice Chairman
AARP State Legislative Committee