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(The following is a paid advertisement)
Headlines about the proposed electric rate freeze extension legislation emphasize the prospect of rate increases. While rate increases are virtually inevitable after a nine-year freeze, equally newsworthy is that a rate freeze extension will actually inhibit electric competition from developing. And competition is what keeps prices down.
The Illinois Commerce Commission has endorsed relying on the competitive marketplace for determining what customers pay for electric power after December 31, 2006. That was the goal of the 1997 legislation passed by the General Assembly that sought to restructure the electric utility industry in Illinois.
The decision made by the legislature in 1997 was the right one. Over time, competition will keep rates down. And the more competition over time, the more stable and predictable rates will be.
Competition will benefit Illinois in the long run. But a rate freeze extension has other dangerous consequences. If ComEd cannot recover its costs to buy power, it could bankrupt the company, increase costs for consumers, and put the reliability of northern Illinois’ electric system at risk.
There’s no need to enact rate freeze legislation. The wisest move would be to let the process move forward, and refrain from using the legislature to undo the progress we’ve made.
Dr. Mort Kamien
Director, Heizer Center for Entrepreneurial Studies
Kellogg School of Management
Northwestern University
posted by Capitol Fax Blog Advertising Department
Wednesday, Mar 1, 06 @ 4:12 am
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