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• W289289628 abstract "Consumer-owned electric utilities stand ready to serve their communities, but a few obstacles remain in their way. Public power is facing profound changes in the delivery of electric utility services. Those who don't understand the democratic, community-based roots of public power believe that choice, competition, and open markets will be its death. Those who do understand public power and its consumer orientation believe that restructuring will allow public power to continue to thrive and prosper. Stakeholders in the debate all pay homage to the proposition that industry restructuring must benefit all consumers. But most stakeholders have done little to assess the probability of success. Instead, they have allowed the debate to proceed on assumptions and clich[acute{e}]s about the benefits of competition and the wonders of the market. Many of these assumptions and clich[acute{e}]s have now been challenged in a recent report, Price Discrimination, Electronic Redlining, and Price Fixing in Deregulated Electric Power, by Eugene Coyle, an economist active in industry restructuring debates. [1] While Coyle's conclusions regarding the benefits of restructuring for small consumers are pessimistic, they also describe the positive impact that electric industry restructuring will have on the nation's consumer-owned utilities, both now and into the future. False Assumptions Coyle argues that policymakers have proceeded on the assumption that competition is always good and that markets always work, when the reality is that for small business and residential customers the result may be otherwise. In fact, a deregulated retail market cannot provide rates that will be reasonable, and non-discriminatory' as is now required in the statutes or regulations of most states. [2] In many cases, competition is regarded as the end, not the means to the end, when, in fact, the desired ends for consumers are lower rates and better service. Competition produces these ends in some industries, but not others. According to Coyle, we don't yet know how deregulated electric markets will behave, and it is dangerous to blithely assume the market will perform better than regulation. Consider airlines, for example. Airlines charge their passengers highly variable prices for tickets in an effort to fill all their seats. Likewise, under deregulation, electric utilities will charge their industrial customers bargain-basement prices, while their small customers, who have little choice in their source of power, make up the difference with higher rates. Competition will not change this. Even if there were many suppliers, price discrimination would continue. In Coyle's view, price discrimination is unavoidable, and it can be controlled in the future just as it has been in the past by regulation or public ownership. Public ownership means that a utility is oriented toward serving the people, not making a profit for its shareholders. And because public power is truly a democratic institution, local control over utility operations--including rates--helps to ensure just, reasonable, and, most important, nondiscriminatory rates for all classes of consumers. Positive Effects Interest in forming new public power systems is higher today than at any time in the past two decades. Communities from Buffalo, New York, to Portland, Oregon, and points in between, are contacting the American Public Power Association for information on the benefits of public power. While community leaders are unlikely to have rigorously analyzed the consequences of industry restructuring for consumers, they seem to understand intuitively that consumers are at risk. And they see public ownership as a means of avoiding that risk while capturing the benefits of lower cost and better service that have been the hallmarks of public power for over a century. As one community activist in Portland put it, With all the madness of deregulation, it is my view that the best thing Portland can do is gain as much control of its energy future as it can. …" @default.
• W289289628 created "2016-06-24" @default.
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• W289289628 date "2000-06-22" @default.
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• W289289628 title "Public Power as Protector" @default.
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