“Electric Deregulation: The Great Failed Experiment”

Comments of Eric J. Epstein,
January 6, 2010


On August 4, 2000 Governor Tom Ridge announced that electric competition would lead to job growth, economic expansion, and decreased rates. According to Governor Ridge, “Pennsylvania’s national leadership in electric competition continues to bring dramatic savings and economic benefits to Pennsylvanians.” Gov. Ridge added, "And, according to this new report, those savings and benefits will continue for some time to come!”

The Department of Revenue released "Electricity Generation Customer Choice and Competition” (August, 2000), and predicted free market nirvana. Secretary of Revenue, Robert A. Judge Sr., forecast reductions in retail electricity prices would lead to the following economic impacts in Pennsylvania by 2004:

The real gross state product will be $1.9 billion higher; overall employment will increase by 36,400 full-time and part-time jobs, nominal personal income will increase by $1.4 billion; the price index will decrease by .47 percent; and the population will increase by 51,400 people, as workers are attracted to job opportunities in Pennsylvania.

The Department of Revenue also reported that deregulation would result in greater sales tax and Personal Income Tax collections.

Could the deregulators have gotten it more wrong?

The reality is not so dreamy. Electric companies are collecting $11.4 billion in stranded costs, shifted taxes to hostage rate payers, and dumped customers at record rates.

Deregulation shifted power plants back to the local tax rolls under the assumption that utilities would pay at least the same amount had they been subject to real estate taxes.

By 2004 homeowners were paying an average of 30% more in property taxes than they did in 1997. PPL and the other electric utility companies are paying 85% less in taxes on their plants, down from about $120 million annually to about $20 million according to a Philadelphia Inquirer analysis.

Uncollectible accounts were supposed to decrease with the price of electric.

On November 19, 2004 - the last day of a “lame duck session” - the General Assembly passed “The Responsible Utility Customer Protection Act” (SB #677 or Chapter 14) at the behest of the energy industry. This legislation - passed in secrecy and without public comment - became Act 201.

Prior to this legislation, the PA Public Utility Commission prevented most winter time utility shut offs between November through March.

Deregulation’s “Consume Protection Act” has produced a 113% increase in terminations. In the first eight months of 2008, PPL cut electricity to 28,561 customers, which was an 111% increase over the number of customers whose power was shut off during the same period in 2007. The statewide average was 24%.

In 2004, about 70% of customers who received notices saying power could be shut off called the company and tried to arrange an alternate payment schedule according to PPL. Now only 28% of those who receive termination warnings try to arrange other payment plans.

But it got worse for Joe the Plumber.

A study published by Carnegie Mellon University's Electricity Industry Center found, “On average, power users in restructured states pay 2 to 3 cents per kilowatt hour more than customers in states that didn't restructure.” (Electricity Prices and Costs Under Regulation and Restructuring, 2008)

Future shock: The Office of Consumer Advocate, in a letter to Governor Rendell on April 20, 2008, estimated approximate increases in the overall rates of residential customers, comparing rates that were in effect and rates that would be expected to be in effect for each company after the rate caps have expired:

Met Ed -54%

PECO - 8%

Penelec - 50%

Allegheny (West Penn) - 63%

These numbers are staggering and coincide with the deteriorating health of Pennsylvania's shrinking middle class. The promise of deregulation leading to more capacity, more competition and lower prices has turned out to be a profitable illusion for a select few.

Pa. leaders have failed to protect us from worst of electricity deregulation

Patriot-News Op-Ed by David Hughes

December 29, 2009


Pennsylvania decision-makers’ poor understanding of the electricity industry led them into a big mistake 13 years ago: Giving up the state’s authority to control electricity-generation prices.

Consumers were promised a competitive retail electricity market that would restrain prices. The warnings that such a market would not develop went unheeded, but they turned out to be correct.

NRC to Meet With Exelon Over Spent Fuel Tech-Specs

 The purpose of this meeting is to discuss the supplement provided by 

Exelon Nuclear on December 18, 2009, regarding a License Amendment 

Request currently under review to revise the Technical Specifications 

related to the Spent Fuel Pool K-infinity value for Peach Bottom Atomic 

Power Station (Agencywide Documents Access and Management System 

Accession No. ML093521435). 

To read the full NRC memo, open pdf: 


TMI Operators License Retake Exam Scheduled for April 2010

 To read the NRC memo related to the TMI operators license exam, open pdf: 


3 states' nuclear petition rejected

December 22, 2009

By Susan Smallheer

STAFF WRITER   Rutland Herald

BRATTLEBORO – The 2nd Circuit Court of Appeals rejected a petition from three Northeast states that sought to have the issue of the safety of spent fuel pools at nuclear power plants considered in any relicensing review.

Massachusetts, Connecticut and New York had all petitioned the Nuclear Regulatory Commission to change its rules to include their safety concerns about the spent fuel contained in nuclear power plant's reactor buildings in any re-licensing review.

The NRC had rejected the states' petitions, and the matter landed in front of the 2nd Circuit, which is based in New York City.

Radiation Monitoring Stations to be Placed Near TMI

EFMR :Radiation Monitoring Stations


Participants Sought for Policy Input






The Nuclear Regulatory Commission will host several public workshops next year to gather input on the agency’s draft policy statement on “safety culture,” and the staff wants to hear from individuals interested in participating in the workshops’ roundtable discussions.

To read the NRC memo, open pdf: 



Report: Spent fuel storage costs may run $225B


By BOB AUDETTE  Brattleboro Reformer

BRATTLEBORO -- If no federal repository for spent nuclear fuel is opened in the next 100 years, the nation’s taxpayers could be on the hook to pay for on-site storage, such as the dry casks at Vermont Yankee nuclear power plant in Vernon.

That cost could run anywhere between $10 billion and $26 billion.



Valve malfunction called "event," then not called "event"

The following is the full content of a report that an "event" at

the Three Mile Island nuclear power plant's Unit 1 reactor had been retracted.

In this case, the "event" refers to three safety relief valves not opening as

they were set to do. "Retraction" does not mean the situation described did not

occur, it means that it will no longer be categorized as an "event."




Power Reactor Event Number: 45464


Obituary: Thomas M. Gerusky

Thomas M. Gerusky, age 74 of Allendale in Lower Allen Twp., died 

Sunday in Select Specialty Hospital, East Pennsboro Twp. 


Mr. Gerusky was born on June 18, 1935 in Fort Edward, near Lake 

George, New York, a son of the late Michael and Marie Varney Gerusky.

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