Competition in Rural Electric Cooperatives? Yay or Nay?

[BamaLefty]

Can competition provide adequate discipline in the marketplace to assure that every American has a satisfactory, reliable and affordable electric power supply, or does that require some government regulation?

Thanks for your thoughts and ideas.

[midnight armadillo]

1. You need regulation. Period.

Here in MA we have electricity deregulation. It sucks - we all pay more now than we did under regulation, and service is not any better. More than that, us customers get to pay the cost of bad utility investments like the Seabrook, NH nuclear power plant.

The result: utilities have no interest in serving tons of customers who use $60 a month of electricity, while they cut deals with big industrial ones. Our service gets pricier and lower quality (right near boston I have frequent low-voltage conditions and short blackouts several times a year) since we dont have enough clout. Competitors for the delivery of electricity service to residential customers literally never materialized, and now we sort of have an unregulated monopoly.

[One_Life_To_Give]

3. The lines were not supposed to be deregualted.

Your problems with blackouts and brownouts are not coming from the suppliers. That is due to the poor condition of the distribution system and lines. Which is supposed to be a seperate regulated monopoly. Your elected reps should be able to put some pressurte on them to get it fixed.

[One_Life_To_Give]

2. Not Yet

We do not have the technology in place to make this work.

[amandabeech]

4. Rural electric cooperatives are owned by the customers they serve.

The prospect of competition is not the driving force in keeping rural electric coops offering good service. If the service is wretched, the customer/shareholders do actually organize and force change by actions at the annual meetings.

Rural electric coops are, I believe, still regulated by the federal government. They were started by FDR in the '30s to help rural areas filled with spread out farms and tiny villages to obtain electric service. The larger utilities were not interested because stringing and maintaining the long lines between customers cost much more than the utilities could receive in payments.

Most rural electric coops do not own their own generating facilities because they are often quite small. Instead, they purchase electricity from a company that runs generators, and strive for the best combination of price and service.

Personally, I am not convinced that deregulation and market discipline has worked out as well as expected, especially for residential customers. I think that the winners are large industrial and commercial customers and very large electrical generating customers.

[NNadir]

5. The theory that "market forces" are the only efficacious way of

managing things is as ridiculous as the assertion that the Soviet Union was a "worker's state."

Some things, and electrical power may be one such thing, are best managed by well regulated monopolies.

[Broca]

6. Wisconsin is becoming partially deregulated

and it has brought bigger and bigger rate increases at closer and closer intervals. We guarantee Utilities a 12 or 13% return so even if they flush the money down the toilet with utility propaganda or overbuilt coal-fired plants they still can say they made a "profit." They just charge expenditures to the consumers.

Many rural cooperatives (electrical) are becoming more and more tied to the big corporate operations. For example, Dairyland cooperative has purchased a 30% interest in a new coal-fired plant being built by WI Public Service Corporation (a corporate utility). Even if they remain independent they are coerced to testify in favor of anti consumer boondoggles and price increases by the big utilities. Their sad story: "they are only trying to keep the lights on and keep babies from dying in incubators when the power goes out."

[Strelnikov_]

7. Based On The Montana Power Saga, I Would Say No

http://www.cbsnews.com/stories/2003/02/06/60minutes/main539719.shtml

Who Killed Montana Power?

The only people not satisfied with the arrangement were the executives at Montana Power. In 1997, their lobbyist pushed a bill through the state legislature to deregulate the price of electricity and open up the market to competition. It was supposed to be good for the consumers, who could decide who they were going to buy their power from at the lowest possible prices.

. . .

It didn't take long before things started to unravel. No sooner had Montana Power sold its dams and power plants, than deregulated electricity prices shot through the roof - and Pennsylvania Power and Light began selling its cheap Montana electricity out of state to the highest bidder.

Electricity prices in Montana doubled, then redoubled, and doubled again - refineries, lumber mills, and the last working copper mine in Butte was forced to suspend operations because they couldn't afford their electricity bills.

“If we were going to continue to run, we were faced with prices that were $150 to $600 a megawatt hour. In other words five to 20 times what we were paying before,” says Greg Stricker, a manager at the mine.

also:

http://www.montanariveraction.org/sorry.saga.mpc.html