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Backlash against dereg

Thursday, Mar 30, 2006

It doesn’t look like the General Assembly will take up this issue before the end of spring session.

The electric deregulation juggernaut that swept the nation in the late 1990s has been replaced by a consumer backlash against energy price increases that threatens to reverse free-market reforms.

Lawmakers from Maryland to Montana worry that the deregulation movement they once embraced has failed to deliver the benefits they promised to constituents.

About a third of the 23 states that passed restructuring laws have revisited or delayed those plans, and some - including New Mexico, Arkansas and Nevada - have passed legislation repealing deregulation laws. Some, like Michigan, deregulated in a way that resulted in smaller rate increases, while others are operating under rate caps put in place years ago and haven’t felt the effects of unfettered markets.

- Posted by Rich Miller        

9 Comments
  1. - Ex-Newie - Thursday, Mar 30, 06 @ 5:26 am:

    Degregulation never seems to work. Look at the airlines. The freedom they were given allowed them to increase fares on less travelled routes so as to price themselves right out of that market. Then they were shot down by increased fuel charges. Result, we have fewer airline companies today.

    The utilities are making a fortune. They have a dozen schemes a day to grab the consumer’s dollars. You have to watch your bills all the time, i.e. AmerenCilco, for instance, does not apply any over-payment against your account. You have to physically call them and tell them to do it. If you do not realize this is going on, it will sit there in their account, gathering interest for them, while you wonder what happened to the over-payment. I found this out personally and when I called them on it, along with informing the ICC and the AG’s office, they finally applied the over-payment to the bill. Of course, reading the bills are also a challenge in themselves. If I, with a Master’s degree, have a hard time figuring out what they are doing, imagine what some older person living alone has to go through to figure it out.

    It’s bad enough that Illinois places so many taxes on top of the utility base rate, so that it costs, for instance, almost $50 a month to just have a phone in your house, let alone make any calls. If we do not rein in these utilities and make them responsible to providing reasonably priced services, the middle class will disappear under the weight of utility costs alone.


  2. - River Forest Tom - Thursday, Mar 30, 06 @ 7:05 am:

    I still marvel that anyone believed ComEd when deregulation was first brought up. Electricity is a natural monopoly if there ever was one. There is just no way that competitors can ever muster the economies of scale that would warrant the cost of the distribution network. Especially egregious is the fact that we as ratepayers paid for the outsized costs of Exelon’s nuke plants and after deregulation, Exelon gets to use those plants to screw us once again. We as voters will never learn.


  3. - Where's that CORE ad... - Thursday, Mar 30, 06 @ 7:13 am:

    Take a look to the right side of the current page and you’ll see the Exelon-funded CORE ad right there…

    Here’s hoping the Dems reverse their anti-consumer position before November because we all know the Big Business GOP could care less about actual people. And why is it that ComEd — the power company — doesn’t actually make electricity? Who came up with that brilliant idea? (Let me guess, a Republican.)

    I’m sure those consumers on the East Coast benefitted greatly from “more competition” when that deregulated Ohio utility let its electric lines fall into such disrepair one bad wire knocked out power to an entire chunk of the country across several states.

    Are folks finally starting to understand that society actually needs a minimum baseline of regulations in order to protect us from the bottom-line-mad corporations? When companies start to worry more about their employees, colleagues, neighbors and consumers we can all revisit regulations — until then the Enrons will go on being Enrons and without regulations we’ll all get screwed. (Or worse, poisoned as the Pacific Gasses and Exelons of our country have done to their neighbors.)

    The almighty dollar should never be more important than a real live person but don’t tell that to the “pro-lie” party, RepubliCo.

    There’s a reason America puts “In God We Trust” on our money — and corporations should try to understand why.


  4. - Where's that CORE ad... - Thursday, Mar 30, 06 @ 7:16 am:

    Oy… I wrote: “The almighty dollar should never be more important than a real live person but don’t tell that to the “pro-lie” party, RepubliCo.

    Freudian slip :) … but you kids knew what I meant about the GOP’s hypocrisy (ie, they’re only pro-life til you’re actually born, then they kick you out on the street and could care less — unless you’re a gazillionaire I s’pose.)


  5. - Reddbyrd - Thursday, Mar 30, 06 @ 10:56 am:

    ComEd took a major hit this week when CUB show segments of the Enron documentary showing how the company California a few years ago. ComEd wants everyone to believe that if they don’t get their way we will have a crisis like California here.
    Now we know it was all a hustle.


  6. - Jimbo - Thursday, Mar 30, 06 @ 1:17 pm:

    Noone wants to pay more for energy. However, for more than a decade, after a 20% cut in cost to the consumer, rates have been frozen. Using simple economics and common sense you can see that if the government keeps on regulating prices, we are not going to have any companies deeming it profitable enough to supply energy. We need to open it up to competition in relatively free market or we will be asking for terrible trouble.


  7. - Common Sense in Illinois - Thursday, Mar 30, 06 @ 2:09 pm:

    Rich…If I remember correctly consumer groups like CUB led the charge to get a competitive industry. Because it takes years to change any particular market’s direction, the rate freeze for residential customers was imposed with commercial and industrial customers picking up the stranded costs of the power companies. Now, in the 11th hour, the conumer types want to say, “Nevermind…but keep the rate freeze on”. Everyone knew this day was coming and that rates frozen for seven years would increase. Surprise guys!


  8. - Navin Johnson - Thursday, Mar 30, 06 @ 3:12 pm:

    Exelon is going to jack up rates next year. The ICC already approved their power auction plan 5 to 0.

    The current rate freeze expires on January 1, 2007. No way Emil is going to let any legislation get out of the Senate that stands in the way of Exelon’s upcoming payday.

    Despite all of Rod’s complaints about the auction plan, he has not taken one tangible step to stop it. All bark no bite.

    AG Madigan is making a good effort to stop the auction, but it is an uphill battle from a litigation standpoint.

    The Democratic Governor, the Democratic Speaker and the Democratic Senate President had four years to come up with a plan to deal with electric markets when the current rate freeze expires. They did nothing. Just remember that the next time you hear Illinois Democrats described as consumer advocates.


  9. - Roadrunner - Thursday, Mar 30, 06 @ 9:45 pm:

    Oh yes, deregulation will make our nuclear plants even safer. Stuff like that tritium spill will most certainly get reported immediately.

    Adam Smith’s invisible hand has a problem; it’s not connected to a heart.


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