Kenneth Piers writes, in response to Glenn Morton, "I am all with Glenn that
we should pay the "real cost of the product". But there is a problem with
this when those who supply the product have a monopoly on their services. In
such cases what is charged to consumers and the real cost of the product may
have little relationship to each other. Trusting the "free market" in such
cases also has its problems. Since the public generally neither gets to see
the utility's books nor the invoices that the utility receives from their
suppliers, it seems that in these cases there is a genuinely positive role
for an independent body to play in seeing to it that fair prices are charged
to consumers - prices that include the "real price of the product" but do
not involve gouging. In Michigan we are just about to bear the brunt of our
actions in utility deregulation. When this was done about 15 months ago, the
agreement was that utilities would fix the price they charged to consumers
for at least two years (a foolish agreement in my opinion but...). Now the
utilities have applied for early release from these commitment and want to
raise the price of their product by 75 to 100% - reflecting, they say, the
increased prices they have to pay their suppliers. None of which makes us
consumers happy. For me it will merely mean somewhat less discretionary
spending. But for low income people this will be a very severe jolt. We can
be sure that energy prices will continue to rise in the future. My greatest
immediate concern is for those who can ill-afford such increasing costs. My
longer concern is that our entire economy could be imperiled."
I think that there are certain activities that should fall outside the "free
market." The utilities belong to this category and, I submit, should be
state owned or at least state-controlled because they can be classified as
"essential services." The task of the utilities should be something like
"to provide sufficient energy for a society to function properly." Instead,
with deregulation and privatization, the goal of these deregulated utilities
has become one of "to make the shareholders rich." IMHO, these two goals
are quite different. If society agrees that I don't have to live where I
work but allows me the freedom to live at some distance from my place of
work, society should see to it that I can get to work and that means that
public transit should function or, if I choose to drive to work, that the
traffic lights are working. The current situation in California is getting
close to making that difficult, if not impossible. State-owned and
-operated utilities may not be as efficient as privately run utilities, but
that's a small cost to pay for the certainty that essential services are
available. If I ever have to have open heart surgery, I prefer to have it in
a hospital that is assured of a continuous supply of electricity.
However, regardless of who runs the utilities, my bet is that we will see
appreciable increases in our utility bills. Yes, the poor will suffer more
than the rest of us and we may well have to advocate financial support for
the poor and, that way, "bear one another's burden." The increased costs of
electricity may very well force us to decrease our energy consumption and
that may not be a bad thing. It's inevitable, anyway, if we plan to leave
some of the resources, that God has given us, for the next generation(s).
In the short run, we may see an exodus from places like California. In fact,
according to the news, the price of natural gas in Alberta is going up by
50% today and some companies are now seriously considering moving to areas
of Canada where energy prices are lower.
I think that, to an appreciable extent, we are now reaping what has been
sown by antinuclear activists. For the last 20 or so years, utilities have
been scared away from building nuclear reactors and have chosen the "easy
way out" by building natural gas-fired turbines. Who can blame them if they
can build a NG-fired generating station in far less time than it takes them
to get approval to build a nuclear power plant? We can now build nuclear
power plants in about 5 years from scratch, so even if society sees the
light (while it is still on) and ceases its opposition to all things
nuclear, it will be at least 2006 by the time we could see a decrease in the
demand of natural gas.
Chuck Vandergraaf
This archive was generated by hypermail 2b29 : Thu Jan 25 2001 - 12:09:08 EST