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California Regulators Claim Structural Separation Action Caused Electrical Distribution Debacle-Same Problems Will Happen in Florida If Bellsouth Is Broken Up Into Wholesale & Retail Companies Business Wire ( July 31, 2001 ) 	
TALLAHASSEE, Fla., Jul 31, 2001 (BUSINESS WIRE) -- A former member of the California Public Utilities Commission (PUC) and his former chief of staff testified today that the electric energy crisis plaguing their state can be directly traced back to structural separation actions the Commission took years earlier. During day two of a Florida Public Service Commission (PSC) structural separation workshop they warned that granting the AT&T request to break up BellSouth into wholesale and retail companies would be leading Florida consumers down that same path. G. Mitchell Wilk and Carl Danner told the PSC today that the California Commission's concerns about possible utility generation market power led it to force utilities to sell off fossil fuel generating plants. This action ultimately resulted in rolling black outs and forced utilities and ultimately the State to buy that power back at higher prices. "Florida can learn through California's mistakes. A breakup will intensify a contradiction between cost-based wholesale prices and subsidized retail rates. Since retail processes must follow wholesale costs, a breakup will accelerate an end to forced subsidies," said former PUC Commissioner Wilk. "The costs of the breakup are large and will affect all customers. By contrast, the alleged benefits are entirely speculative, and have been forcefully disputed." Danner also told Florida Commissioners that a breakup would be costly and difficult to reverse. "The public wants convenience and simplicity, but will get more confusion, complexity and cost," said Danner. "Competitors will see this as one more means to use the regulatory process against one another by trying to plunge the PSC into micro-management. All this new industry cost will be paid for by consumers and will subtract from Florida's economy." Wilk added that a true debacle in what is now an efficient and evolving telecommunications network might occur through structural separation actions. "California failed by seeking to deregulate electricity generation, while using a highly-regulatory approach to do so," said Wilk. "The breakup proposal here in Florida would attempt the same by adopting highly intrusive regulation, at a time when there is robust competition in the state. It would be economically counterproductive for the consumers and impede on the evolution of technology in Florida." CONTACT: BellSouth