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