WASHINGTON — A long-awaited Clinton administration plan to deregulate the electric utility industry is drawing cautious praise from the plastics industry, even as companies raise concerns that it would let states choose not to deregulate and to mandate some environmentally friendly but more-expensive power generation.
The March 25 administration plan, its first substantial statement on the issue, would deregulate the industry by Jan. 1, 2003. But, in a point opposed by plastics industry lobbyists, it would let states choose not to deregulate if they feared their own low-cost power would get more expensive.
The plan also would let states decide how much stranded investment electric companies can recover, but would require states to limit that to ``legitimate'' costs, a point favored by plastics industry lobbyists.
And it would require utilities to get 5.5 percent of their power in 2010 from renewable sources, which generally are more expensive, but reduce greenhouse gas emissions.
``The proposal doesn't contain everything we would like, but for the most part it is very good,'' said Jim Pasierb, spokesman for the Arlington, Va.-based Chemical Manufacturers Association.
Lewis Freeman, vice president of government affairs for the Washington-based Society of the Plastics Industry Inc., said his initial reaction to the proposal is that it is good.
``It would be difficult for this issue to move forward in Congress without the administration stepping forward,'' he said.
But that may not be enough to get such legislation passed in an election year shortened by the upcoming campaign season, industry observers said.
``It could shake some rocks loose on the mountain,'' said Bob Carpenter, Washington manager of congressional affairs for Warren, N.J.-based Hoechst Corp. ``That avalanche is going to start moving down the mountain.
``Whether we will get legislation in this Congress, that is a long shot. [But] it clearly tees this up for the next Congress,'' he said.
Passing legislation out of a congressional committee would be a significant step, according to Carpenter.
The plan generally was praised by the electric utility industry, but was criticized by environmental groups for not pushing utilities to cut emissions of global-warming gases.
Sixteen states have deregulated, and plastics industry lobbyists have paid attention to the issue in Washington because they say deregulation could lower power costs 5-15 percent.
Legislators in the plastics heartland of Ohio introduced a bill March 26.
Rob Simon, CMA manager of state issues, said the bill is the most ``pro-competitive'' he has seen. He added that it has a decent chance of passing but could be bogged down by debates about school funding in the Ohio Legislature.