our Electric Rates are Going Up, Up, Up!

by Mike DeRosa

Every monopoly that has ever come to power has done so under the banner down with monopoly! The latest example of this is taking place in the CT General Assembly and it has its roots in the passage of the so-called electric restructuring law in 1998. If you have not heard of electric restructuring all you have to do is look at your electric bill to get the details. You better look closely at your bill in the future because you are about to feel real electric rate sticker shock.

Once upon a time, we had Northeast Utilities and United Illuminating. They distributed and generated electricity and they were given what some people called a natural monopoly. These two companies were given an exclusive right to distribute and sell electricity within Connecticut on our electric lines. No one else was allowed to do this. These I.O.U.'s (Investor Owned Companies) did some really crazy things like build nuclear power plants (and thereby gave us expensive electric power) and they gave us good things that included reliable and available electric power.

But all that changed when the Connecticut General Assembly passed a new law that "deregulated" electric generation in 1998, so that anybody could sell electricity in Connecticut. The hundreds of lobbyists hired by big energy companies, like Enron, told our legislators that electric "restructuring" would significantly reduce the price of electricity, would improve service, and would bring on a whole new world of "competition". They said that many states, including California, were changing to this new way of generating and selling electricity. Big money interests, like the C.B.I.A and the CT Chamber Of Commerce, and powerful political figures like Gov. John Rowland , Sen. Melodie Peters (D-New London), and Rep. Tom Ritter (D-Hartford) told everybody that this idea was the best thing since sliced bread. N.U. said it was losing its monopoly and needed to be compensated so they invented the concept of "stranded costs" and the legislators quickly ordered the ratepayers to reimburse N.U. to the tune of billions of dollars for a dubious extension of their property rights when N.U. said it owned a monopoly. Hundreds of powerful lobbyists, including powerful ex-legislators like Hartford's own Bill DiBella, were collectively given millions of dollars to promote the wonderful world of "competition" and "restructuring". These paid corporate hacks said that N.U. and U.I. would still have their monopoly to distribute electricity in Connecticut but they gave up their right to be the sole generator of electricity in the brave new world of electric "restructuring".

But did N.U. really lose its monopoly?

Let's fast forward to 2003. After four years we now have a "competitive" market with only one competitor. This isn't only illogical it is definitely bad form. As part of the restructuring bill in 1998 N.U. created a wholly owned subsidiary called Select Energy which sold the "standard offer" which made Select Energy (i.e. N.U.) the "generator of last resort." The problem is that just about everybody is now buying their electricity from the company that is being compensated for losing a monopoly that they no longer have but a market that in fact they still completely control. Confused? You see, in the world of electric restructuring in Connecticut some generators of electricity are more equal than others. This has nothing to do with "electric choice", it has everything to do with corporation clout. The legislators who let certain corporations write this law know who has the clout.

We were sold a bill of goods in 1998 when the CT legislature passed this bill. We were told that electric rates were going to go way down. The people of California were sold a bill of goods when they adopted "electric restructuring" in 1996. In late 2000 and 2001 they ended up with the four B's: Blackouts, Brownouts, Bailouts, and Bankruptcies. Their rates soared and are still well over 100% higher than they were before "restructuring". Similar things happened in Montana and in other states. The generators and the utilities (i.e. Enron, Reliant, P.G. & E, El Paso Gas, Duke Power etc.) manipulated the electric rates in California and created a phony energy crisis. They discovered what New England is about to find out: We are moving from the era of regulated monopolies to the age of unregulated oligopolies. Oligopolies by definition do not compete, they collude.

As this is being written the Connecticut General Assembly is extending the standard offer for another two years, in a competitive market that has only one competitor, and they are putting in legislative authority that will allow N.U.(Select Energy) to raise the price of electricity as part of this standard offer. They really don't have any choice, and neither do we. They are punting and they hope that no one will figure out that they don't know what their doing. But no matter what they do now or in the future you can bet that "electric choice" means higher electric rates for the residential and business user of electricity. If some of these legislators get their way the price will be put even higher to "facilitate a transition to a mature" market. Which means that your going to see higher and higher prices on your electric bill because the only way any of these electric generators can make money in this "new" market is to raise the price substantially and get all of us to use more and more of our precious electric power. So what was the point of this whole scheme?

If your elected officials at the legislature get their way in the near future, the only way your going to see a reduction in your electric rates is if your in the dark. Keeping you in the dark politically is where they want you to be.

Don't let them get away with it!