And rate caps distorted reality
Letters: And rate caps distorted reality
By William L. Massey, COMPETE Coalition
Philadelphia Daily News
January 26, 2009
The problem Pennsylvania electricity consumers face is not competitive markets but that competition hasn't been allowed to freely work (op-ed, "Electric Rate Shock"). Because of rate caps, consumers have been shielded from the real cost of electricity for more than a decade. Consumers in states without rate caps have gradually absorbed a proportionate rise in rates from escalating fuel costs over several years.
No market or regulatory structure can protect against rising fuel costs in a global energy market. But price is only one measure of success. Pennsylvania consumers enjoy other benefits provided by competition, like the development of renewable wind energy and related jobs. According to the American Wind Energy Association, more than 70 percent of wind resources are in competitive markets like Pennsylvania, despite the fact that only 44 percent of wind energy potential is found in these areas.
Wind energy producers and consumer representatives joined me in testifying before the Pennsylvania Public Utilities Commission on Dec. 18 about the real benefits provided by competitive electric markets. Big employers like Wal-Mart talked about major energy savings, which not only help them provide jobs but let them pass savings on to customers. State manufacturer Leggett & Platt touted the efficiency and flexibility of competition to control energy costs and preserve jobs. These and other consumers strongly favor competitive electricity markets.
Returning to the failed system of monopoly utility regulation won't solve concerns about prices, won't provide job growth and won't help meet our enormous energy challenges with clean energy sources and other innovations. Policy decisions should be made with a long-term focus on what will foster efficiency, reliability and environmental benefits. Competitive markets continue to prove they are better equipped to meet these challenges.
William L. Massey, Counsel
COMPETE Coalition
Washington, D.C.
