back to dereg | ratville times | rat haus | Index | Search | tree

( ASCII text format )

The following is mirrored from its source at:

It's Greed, Stupid!
Debunking the 10 Myths of Utility Deregulation

January 30, 2001

WASHINGTON, D.C. -- Proponents of deregulation have developed a repertoire of excuses for why electricity deregulation is failing miserably. Rather than admitting that a speculative market for a life-sustaining commodity such as electricity does not work, they have cultivated such myths as, "California just didn't deregulate enough."

In fact, if the retail price for electricity was completely deregulated as the industry suggests, the average consumer's electric bill would be $600, rather than the approximately $55 charged before deregulation, according to Public Citizen's calculations.

This is just one of ten myths debunked by a Public Citizen report released today. The report examines in detail arguments that deregulation proponents are making and explains why these contentions are false.

"Already, consumers and small businesses have been hijacked because California's deregulation law, which has allowed so-called `free market' forces to reign in California's electricity market, has allowed power suppliers to rake in billions in excess profits," Public Citizen President Joan Claybrook said.

By both exerting market power and manipulating the next day's spot market for electricity, these suppliers keep electricity supplies low and prices high, for instance by employing unscheduled power plant closings. They have created a crisis in California that may drive the state into a recession and has done nothing to ensure that consumers have affordable, reliable electricity.

In keeping with their long-range business plans to dramatically expand sales, power suppliers blame the current problems on too few power plants. Their solution is to repeal power plant and transmission line siting laws and to suspend environmental regulations that protect people's health, so that they can engage in a building frenzy.

"If the power suppliers selling electricity in California have their way and retail prices for this important commodity are left to the vagaries of the market, the average consumer could be paying 12 times more for electricity than they were before deregulation," said Wenonah Hauter, director of Public Citizen's Critical Mass Energy and Environment Program.

The myths include:

# # #

back to ratville times | rat haus | Index | Search | tree