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Plain Talk: Dave Zweifel

February 7, 2000 Deregulation: Utilities win, consumers lose

If the big privately owned utilities have their way, the electric power industry will be completely deregulated in the not too distant future.

Some 23 states, but not Wisconsin yet, have already embraced complete deregulation, throwing the generation and distribution of electricity open to the market and its competitive forces.

A recent study by U.S. Department of Energy investigators, however, questions whether this is progress.

An unintended consequence of all this deregulation, the study said, has been more power failures and other reliability problems with the country's electricity grid.

The Department of Energy investigators concentrated on power failures and disturbances that hit New York, New Jersey, Delaware, Maryland, Virginia, Mississippi, Arkansas, Texas, Louisiana and Illinois last summer, as well as mid-Atlantic and New England states.

"In anticipation of competitive markets, some utilities have adopted a strategy of cost-cutting that involves reduced spending on reliability,'' the study said. " ... in many cases, state and federal regulatory policies are not providing adequate incentives for utilities to maintain and upgrade facilities to provide an acceptable level of reliability.''

These concerns are in addition to the warnings that utility deregulation will eventually create an unfair marketplace for the typical electricity consumer, the homeowner.

When regulation is eliminated, utilities will be free to compete for large power customers. For instance, Alliant Energy could try to "pick off'' the Oscar Mayer plant from MG&E by submitting a lower bid.

That's good news for Oscar Mayer, but maybe not so good news for the rest of MG&E's customers, who would likely have to help make up for the loss in revenue to the losing utility.

It was only last week in Chicago that the owners of the giant downtown Sears Tower decided to drop Commonwealth Edison in favor of a newly formed company because it offered more favorable rates. Again, the citizens of Chicago will probably be the ones to suffer.

It isn't economical, after all, for utilities to compete for individual homeowner accounts. They will pick only the plumpest cherries.

And once again, those with the wealth and power will get the breaks.

) 2000 The Capital Times

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-- Dee (t1colt556@aol.com), February 07, 2000

Answers

Read "Who Owns the Sun" by Berman. It's a rather tedious read but what it has to say is significant and reveals the deregulation scam for what it is.

I hadn't realized that John Rowe's newest empire was starting to unravel a little at the hem. Oh well, a thread here, a knot there.

The next public move he'll make is a separation of the generation and transmission/distribution companies. First though he'll have to get some politically influential people on the Board of Directors at both PECO and UNI. His game worked for NEES, why not in Chicago?

A modern "Energy Caesar."

Good luck! Best regards,

-- Joe (KEITH@neesnet.com), February 07, 2000.

Thanks Joe!

-- Dee (t1colt556@aol.com), February 07, 2000.

Like the phone companies don't compete for the home user's business, right? Like the oil companies don't care about the home user filling his gas tank? Give me a break. "Individual homeowner accounts" are a huge business, in the aggregate, and it's generally the utilities and Clinton socialists who find the free market threatening. .

-- freez (tomjefferson@ben.franklin), February 07, 2000.