Expert: Years until healthy electricity market

ILLINOIS - A robust competitive market for retail electric customers could take five to seven years to develop, according to an economic expert who testified recently before the Illinois Commerce Commission.

A.J. Goulding of London Economics International, spoke at an ICC workshop on retail electric competition. He said it would be "unrealistic" to expect a healthy competitive retail market to develop in three years or less.

Suppliers of electricity say retail electric competition is possible in Illinois now because of the impending end of a nine-year rate freeze. Companies that couldn't compete against nine years of artificially low rates enjoyed by ComEd residents are now thinking about breaking into the market.

Ronald M. Cerniglia, director of the Office of Retail Market Development at the New York State Public Service Commission, said educating consumers is key to making competition work.

Cerniglia's office runs a Web site called "Power to Choose," which supplies consumers with information about prices and plans offered by different suppliers.

Christopher Thomas, director of policy for the Citizens Utility Board, a consumer watchdog group, said competitive choice for retail customers "should be considered carefully and developed appropriately."

He said he wouldn't want a repeat of what has happened in the natural gas market in Illinois - with door-to-door salesmen offering misleading information to get people to sign up for plans.

CUB is pushing for a three-year extension of the electric rate freeze - a measure supported by Illinois House Speaker Michael Madigan.