It’s Time To Pull the Plug on Deregulation
By Eric Epstein
With rates set to spike, a dramatic rise in the number of delinquent
customers, and the number of consumers losing power at record levels,
can we afford to do nothing as PPL sets to jack up electric rates by 40 percent?
Since the deregulation of the electric industry, the processes and
agencies charged to encourage, solicit, and facilitate public participation
have failed to connect or create viable and sustainable platforms. People
know about “rate shock," but feel they are impotent to influence the outcome
of a partisan decision made on behalf of the utility industry.
The debate has occurred at the upper end of the financial stratosphere.
Policy has been limited to vested energy experts, ill-informed lobbyists,
and think tanks that “think” they know what’s best for the consumer.
It's like a weather man predicting a storm, but only broadcasting to
private country clubs. I can’t think of any other public policy issue that
has elicited so much intellectual lard. When did it become OK to reduce
people to a social engineering experiment based on speculation?
This issue deserves a heated debate and a public referendum before
working families and senior citizens are submerged into a hardship class.
People are not abstract hypotheticals that attorneys in Harrisburg can
rework into a neat formula.
Incumbent utilities are enjoying record profits, collecting close to $12
billion in stranded costs (mostly due to cost overruns at nuclear power
plants), and shifted their property tax responsibilities onto the backs of
reactor communities and rate payers.
It's a great bargain, if you're PPL. Last year the company reported over a $1
billion profit on $6.5 billion in revenue, and set records in consumer cruelty.
In eight months of 2008, PPL cut electricity to 28,561 customers – an 111 percent increase over the number of customers whose power was shut off during the same period in 2007. Statewide, an average 24 percent of PPL customers have their service cut each year.
Uncollectible accounts were supposed to go down with the price of
electricity. The promise of more competition leading to more capacity and
more competition and, in turn, lower prices has turned out to be a profitable allusion
for a select few. “On average, power users in restructured states pay 2 to 3
cents per kilowatt hour more than customers in states that didn't restructure,”
according to "Electricity Prices and Costs Under Regulation and Restructuring,"
a study published by Carnegie Mellon University's Electricity Industry Center.
(“Competition hasn't cut electric rates,” Tribune Review, March 5, 2008.)
If these results were taken to town hall meetings, consumer participation
would skyrocket. But the debate should not be about extending the rate
caps; rather, the discussion should about re-regulating the electric industry.
So far the arrangement of a government-monitored oligopoly has
contained costs, introduced alternative energy sources, and ensured reliable
service. There is no need to tamper with a system which has benefited
consumers and allowed companies to profit.
The electric industry has never been competitive, and further corporate
consolidation and realignment makes “competition” nothing more than a
cruel joke for customers. Deregulation purports to allow the market
to referee price, but this belief fails to factor externalities. The “market” doesn’t account
for the costs of pollution or resource depletion which includes the tremendous
amount of water needed to cool coal and nuclear plants.
Removing proven and effective operating rules for electrical generation
and transmission is not in the best interests of customers or economic
development. It’s time pull the plug on the deregulation experiment.
Eriv Epstein is chairman of Three Mile Island Alert, Inc., a safe-energy organization based in Harrisburg, Pa., and founded in 1977. TMIA monitors the Peach Bottom, Susquehanna, and Three Mile Island nuclear generating stations: tmia.com
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