Commentary –

Enjoy Your Electricity Now

By William A. Collins

Scaling competition’s

Heights;

Now I haven’t any

Lights.

In case you’d like to see what your electric bill will look like five years from now, you’re in luck. No, you needn’t pay Madame Zsa Zsa 10 bucks for a reading. You can do it yourself for 50 cents. Just pick up a newspaper and scan the latest word from California.

They’ve deregulated power out there. You know, much as we did here. Competition was then supposed to drive the price down. Well, guess what? Without regulation, nobody bothered to build any new plants. Thus there is now a profound shortage of power, even in winter, and the current competition is to see how high, not how low, rates can go. The old utility companies are caught in the middle, still regulated as to what they can charge consumers, but unregulated in what producers can charge them. They’re headed out of business shortly unless the state bails them out.

The results for California’s economy have grown catastrophic. Power cutbacks have already started, threatening quick bankruptcy for companies who signed up for interruptible service. New industrial development has also come to a screeching halt. And get this – Alcoa, up in Washington, has shut down. It found that it can make more money selling its Bonneville Dam electricity quota to California, while paying its employees to stay home, than it can by producing aluminum.

Suspiciously, 25 percent of California’s generating capacity is also down for repairs just now. Some hint at collusion. In any case, owners are in no hurry to get those plants back on line. They’re making more money now by simply inflating the rate that they charge for the juice from their remaining plants. It’s classic capitalism. But even when those sick plants do come back on line, things won’t improve much. California is heavily dependent on natural gas for its generators, and neither new wells nor new pipelines have kept pace with overall growth. Thus gas prices are rising like the cost of a new bomber.

Connecticut, you won’t be amazed to hear, is headed down this same path. NRG Energy has purchased 12 of our state’s power plants, including all of the “Filthy Five.” It will then control virtually all of the state’s marginal capacity – the kind that gets switched on in a heat wave. As soon as price controls expire, you can imagine what will happen to our rates during the summer.

And there’s more. Dominion Resources, a utility bottom-feeder, is buying the Millstone nuclear plants at a bargain price. It has little risk. The deregulation law gave it a generous pot of cash, paid for by us, to decommission Unit 1. If it keeps Units 2 and 3 going, it will make a killing selling us power as soon as price controls expire. But if that profit isn’t big enough, it can close Unit 2 and make another bundle by decommissioning it. Then it can jack up the rate for juice from Unit 3, because we would suddenly face a dire shortage.

So why don’t competitors spring up to build new plants? That’s how competition is supposed to work. Hah! Do you want a new power plant in your neighborhood? Plus there isn’t sufficient gas to supply enough new ones anyway.

So, is there a solution? No good ones, but a couple which are better than doing nothing. First is to re-regulate. It would cost us plenty in damages, but it would still be a lot cheaper than letting prices go hog wild. Or we could do as Los Angeles does. It is quietly avoiding the surrounding cataclysm by owning its own power plants. That would also be expensive, but the safest bet in the long run. Electricity is just too important to be left in the hands of speculators.

And for added perspective, consider that this mess is exactly what the IMF imposes on poor nations as a condition for loaning them money. It helps explain all those protests.

(Columnist William A. Collins is a former state representative and a former mayor of Norwalk.)