Friday, August 15, 2003

Some excerpts from the Buffalo News article cited by the WSWS:
So this is what we get from deregulation: A rate increase that will push up bills for most Niagara Mohawk residential customers by 8.2 percent.

Isn't the free market just grand?

It wasn't supposed to turn out this way.

The grand plan hatched by state regulators five years ago was supposed to provide a cure for the sky-high electric rates that have sapped some of the life out of the Upstate economy and burdened its residents. Make the state's utilities sell off their power plants and create a wholesale market for electricity that would reward innovation and efficiency and push prices lower. Open up the utility's monopolistic control over its customer base so new electricity suppliers can jump in with innovative offers that save consumers even more. . . .

deregulation isn't working out quite the way state regulators had hoped.

"The idea was that new competitors would come on the scene and be the salvation," says Gerald A. Norlander, the executive director of the Public Utility Law Project, an Albany advocacy group for low income consumers. "That's not happening."

. . . The PSC [Public Service Commission], however, says passing on the actual cost of electricity to customers, which is standard practice with natural gas utilities, is essential to avoid a California-type crisis. To have a free market that functions properly, consumers need to know how much their electricity really costs, whether that's through rates that are adjusted monthly, as with the NiMo plan, or with rates that change daily or by the hour, as some big businesses now pay. That way, they can react by reducing their power consumption when prices are high or shifting their electricity use to a time when demand -- and prices -- are lower.

Energy officials say those market signals helped reduce the need for power by as much as 400 megawatts during the August heat wave and help avert blackouts at a time when the demand for electricity was at a record high.
Well, maybe not after all.

Source: "Deregulation of electricity isn't working out as hoped," Buffalo News, 2 September 2001: B5.

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