The Ameren Monopoly
Jim Syler (aka Calion), Chair of the fringe Southern Illinois Libertarians recently wrote in Carbondale Bytelife about ‘Electricity, markets and monopolies”
In classic Libertarian-speak Syler asserts, “The only way out of our electricity problem is to cut Ameren loose from its state-privileged status, to fly or fall on its own.” He says this will benefit consumers because Ameren”will be afraid that if their price is too high or their service too poor, other companies will come in and try to undercut their business.”
I’m convinced that Libertarians want utilities to rain havoc on consumers. From the flames of the resulting chaos, they have an expectation that some Phoenix-like, benevolent, natural order (and Wal-Mart style ‘Falling Prices’) will spontaneously sprout from the ashes.
The Illinois Libertarian Party takes the position that:
Most of the disastrous utility laws now on the books began with deregulation brought about by the Energy Policy Act of 1992. That’s the same complex act (393-pages) that, in its infinite wisdom, designated Yucca Mountain as the ‘permanent disposal site’ for used nuclear fuel and other radioactive materials from commercial nuclear power plants and U.S. Department of Defense activities. The act distorted alternative transportation fuel development leading to uneconomic subsidization of ethanol from corn. It’s the same act that also failed to significantly raise automobile fuel economy (CAFE) standards.
The latest incarnation of AmerenCIPS is one of nine public utilities in Illinois that are retailing monopolies regulated by the Illinois Commerce Commission (ICC), a state agency established to “to pursue an appropriate balance between the interest of consumers and both emerging and existing service providers in accordance with applicable statute and rules.”
Essentially, when it comes to electric utilities the ICC has repeatedly blown numerous opportunities since the 1980’s when I helped argue before the ICC that Ameren needed to invest far more in sustainable energy solutions such as conservation and renewables. First, the ICC failing to foster significant demand reduction and demand management solutions that would reduce the need to build more polluting coal and nuclear power plants. Then it failed to guide acquisition of renewable energy supply sources, and most recently, it miserably failed to protect the electorate from an artificial purchasing process where the new “retailing Ameren” gets to buy power from the old “power generation Ameren” company at unnatural prices.
No, sorry, I cannot see cutting “Ameren loose from its state-privileged status, to fly or fall on its own.” Not when there are so many opportunities for the company to leverage its unregulated monopoly status to pillage its customers’ bank accounts. There is no quick easy solution. The solutions I see working best in the long run are those that turn every home and business into both an energy demand reduction engine and a distributed energy producer using renewable sources such as wind, solar, geothermal and other clean fuel technologies.
In classic Libertarian-speak Syler asserts, “The only way out of our electricity problem is to cut Ameren loose from its state-privileged status, to fly or fall on its own.” He says this will benefit consumers because Ameren”will be afraid that if their price is too high or their service too poor, other companies will come in and try to undercut their business.”
I’m convinced that Libertarians want utilities to rain havoc on consumers. From the flames of the resulting chaos, they have an expectation that some Phoenix-like, benevolent, natural order (and Wal-Mart style ‘Falling Prices’) will spontaneously sprout from the ashes.
The Illinois Libertarian Party takes the position that:
“Allowing the free market to set electricity rates is the best way to get reliable service at competitive rates. The Libertarian Party of Illinois opposes legislation that controls prices for any market service, including electricity.”Libertarians simply choose to ignore both distant and recent history of scandalous abuses by utilities that were unregulated monopolies. I’ll be the first to admit that understanding utility regulation is not an easy task. There are so many federal and state laws that have distorted the market. Many of the laws were actually written by the utilities, handed to legislators, and hastily passed without decent analysis. It should come as no surprise that the electric industry sought to improve the profitability of its monopoly standing by giving “more than $40 million to Congress since 1999 (more than two-thirds to the Republican Party) and spent an additional $260 million lobbying the federal government over that same time period. The crisis we are in now in Illinois over deregulation and high prices was nurtured in the utilities and sold to the ICC as a universal panacea for Illinois energy problems. Everybody was tricked into or bought-out by the plan. Just follow the money!
Most of the disastrous utility laws now on the books began with deregulation brought about by the Energy Policy Act of 1992. That’s the same complex act (393-pages) that, in its infinite wisdom, designated Yucca Mountain as the ‘permanent disposal site’ for used nuclear fuel and other radioactive materials from commercial nuclear power plants and U.S. Department of Defense activities. The act distorted alternative transportation fuel development leading to uneconomic subsidization of ethanol from corn. It’s the same act that also failed to significantly raise automobile fuel economy (CAFE) standards.
The latest incarnation of AmerenCIPS is one of nine public utilities in Illinois that are retailing monopolies regulated by the Illinois Commerce Commission (ICC), a state agency established to “to pursue an appropriate balance between the interest of consumers and both emerging and existing service providers in accordance with applicable statute and rules.”
Essentially, when it comes to electric utilities the ICC has repeatedly blown numerous opportunities since the 1980’s when I helped argue before the ICC that Ameren needed to invest far more in sustainable energy solutions such as conservation and renewables. First, the ICC failing to foster significant demand reduction and demand management solutions that would reduce the need to build more polluting coal and nuclear power plants. Then it failed to guide acquisition of renewable energy supply sources, and most recently, it miserably failed to protect the electorate from an artificial purchasing process where the new “retailing Ameren” gets to buy power from the old “power generation Ameren” company at unnatural prices.
No, sorry, I cannot see cutting “Ameren loose from its state-privileged status, to fly or fall on its own.” Not when there are so many opportunities for the company to leverage its unregulated monopoly status to pillage its customers’ bank accounts. There is no quick easy solution. The solutions I see working best in the long run are those that turn every home and business into both an energy demand reduction engine and a distributed energy producer using renewable sources such as wind, solar, geothermal and other clean fuel technologies.
