DIE HARD III / Herman Tiu Laurel / January 29, 2014
“Electric deregulation fails to live up to promises as bills soar... 4-21-2007, by Ryan Keith, Associated Press, Benton, Ill. — This wasn’t supposed to happen with deregulation. Electric bills were supposed to go down. Instead, Ellie Dorchincez can almost see the dollars evaporating every time she turns on the lights or opens the freezer at her small Farm Fresh grocery store. Her electric bill, which used to be about $800 a month, has jumped to $1,800. She’s shut down a large freezer of frozen treats and now closes the store an hour early to cut costs but fears she still may have to raise prices and lay off some workers.
‘I’m just trying to figure any way that I can right now to keep my business afloat,; Dorchincez said. ‘My life is at stake here.’
“The cause of her distress is a common problem: the failure of deregulation to deliver its promise of lower electricity prices. In many states, it’s had the opposite effect with sharply higher rates — 72 percent in Maryland, up to 50 percent in Illinois. Not one of the 16 states — plus the District of Columbia — that have pushed forward with deregulation since the late 1990s can call it a success. In fact, consumers in those states fared worse than residents in states that stuck with a policy of regulating their power industries. An Associated Press analysis of federal data shows consumers in the 17 deregulated areas paid an average of 30 percent more for power in 2006 than their counterparts in regulated states. That’s up from a 24 percent gap in 1990...”
From Australian, “Economic Affairs: Privatization has failed to deliver cheaper electricity... by Colin Teese (former secretary Dept. Of Trade), News Weekly, May 1, 2010... Victoria’s State Electricity Commission generated and sold power to Victorian consumers from 1926 to 1998. In every single year it reduced the real price of power to customers. Since privatization, however, electricity prices to the consumer have gone up 50 percent. Competition in power generation makes no sense — To have two power-generating companies (or more), with their separate and enormously costly equipment... governments, ...can borrow at cheaper rates than can private companies... fine-tune the system better with a combination of power plants to ...meet the unexpected surges in demand.”
From Britain, “The grip of privatization on our vital services has to be broken... powerful interests are driving a 30-year failed experiment. Utilities belong in public hands — Seumas Milne, The Guardian, Tuesday, 29, October 2013... Ever since Ed Miliband forced electricity and gas profiteering... The monopolists have outdone themselves. Squealing that such interference threatened power cuts, one after another has taken the opportunity to jack up prices still further. Four of the ‘big six’ cartel, which controls 98 percent of electricity supply, have now increased prices by over 9 percent — blaming green levies and global costs — while wholesale prices have risen 1.7 percent in the past year and profit per customer’ has doubled... Thousands of old people will certainly die this winter...
In the Philippines the steps toward privatization of utilities, including electricity, started with the ascendance of Corazon Aquino to power after Edsa I. The first overt at was the appointment of electricity oligarch Ernesto Aboitiz to head the National Power Corp., an appointment with a clear conflict-of-interest involved as Aboitiz is part of a family that is a major power generator and electricity distributor, producer and supplier. Systematic cancellation and delay of various power projects were done leading to the power crises, the “Dark Age,” from 1989 to 1995 which justified Fidel V. Ramos’ massive Independent Power Producers contracts and later the Epira in 2001 after the ouster of President Estrada who dragged his feet on the Electric Power Industry Reform Act.
The Philippines has now had at least 25 years of experience with public utilities privatization and deregulation, it’s time we learned the lesson and change course just as many countries are beginning to do.
(Watch GNN on Saturdays, 8 p.m. and Sun 8 a.m. on Destiny Cable Chanel 8 and Skycable Chanel 213, this week “Public ownership: solving the Epira Disaster”; my emergency e-mail htlnow@fastmail.fs; tune to 1098AM Tues. To Fri. 5 p.m to 6 p.m.)
As the Philippines ponders its power ills from its recent price shocks, let’s look at the experience of other countries in the world with the same problem. From the US are some of the following reports and commentaries we gathered:
“Deregulation in Texas fails to make power more reliable, cheap... Jan. 13, 2013... A decade of electricity deregulation in Texas has driven up the pay of investor-owned utilities’ chief executives, but it has not fulfilled promises to produce the nation’s most reliable and cheapest power. In fact, deregulation has had the unintended consequence of discouraging the building of new power plants, leaving the state’s power supplies vulnerable as Texas continues to grow... A new report from the Texas Coalition for Affordable Power says Texans in deregulated areas paid $10 billion over the national average for power over the last decade.”
“Deregulation in Texas fails to make power more reliable, cheap... Jan. 13, 2013... A decade of electricity deregulation in Texas has driven up the pay of investor-owned utilities’ chief executives, but it has not fulfilled promises to produce the nation’s most reliable and cheapest power. In fact, deregulation has had the unintended consequence of discouraging the building of new power plants, leaving the state’s power supplies vulnerable as Texas continues to grow... A new report from the Texas Coalition for Affordable Power says Texans in deregulated areas paid $10 billion over the national average for power over the last decade.”
“Electric deregulation fails to live up to promises as bills soar... 4-21-2007, by Ryan Keith, Associated Press, Benton, Ill. — This wasn’t supposed to happen with deregulation. Electric bills were supposed to go down. Instead, Ellie Dorchincez can almost see the dollars evaporating every time she turns on the lights or opens the freezer at her small Farm Fresh grocery store. Her electric bill, which used to be about $800 a month, has jumped to $1,800. She’s shut down a large freezer of frozen treats and now closes the store an hour early to cut costs but fears she still may have to raise prices and lay off some workers.
‘I’m just trying to figure any way that I can right now to keep my business afloat,; Dorchincez said. ‘My life is at stake here.’
“The cause of her distress is a common problem: the failure of deregulation to deliver its promise of lower electricity prices. In many states, it’s had the opposite effect with sharply higher rates — 72 percent in Maryland, up to 50 percent in Illinois. Not one of the 16 states — plus the District of Columbia — that have pushed forward with deregulation since the late 1990s can call it a success. In fact, consumers in those states fared worse than residents in states that stuck with a policy of regulating their power industries. An Associated Press analysis of federal data shows consumers in the 17 deregulated areas paid an average of 30 percent more for power in 2006 than their counterparts in regulated states. That’s up from a 24 percent gap in 1990...”
From Australian, “Economic Affairs: Privatization has failed to deliver cheaper electricity... by Colin Teese (former secretary Dept. Of Trade), News Weekly, May 1, 2010... Victoria’s State Electricity Commission generated and sold power to Victorian consumers from 1926 to 1998. In every single year it reduced the real price of power to customers. Since privatization, however, electricity prices to the consumer have gone up 50 percent. Competition in power generation makes no sense — To have two power-generating companies (or more), with their separate and enormously costly equipment... governments, ...can borrow at cheaper rates than can private companies... fine-tune the system better with a combination of power plants to ...meet the unexpected surges in demand.”
From Britain, “The grip of privatization on our vital services has to be broken... powerful interests are driving a 30-year failed experiment. Utilities belong in public hands — Seumas Milne, The Guardian, Tuesday, 29, October 2013... Ever since Ed Miliband forced electricity and gas profiteering... The monopolists have outdone themselves. Squealing that such interference threatened power cuts, one after another has taken the opportunity to jack up prices still further. Four of the ‘big six’ cartel, which controls 98 percent of electricity supply, have now increased prices by over 9 percent — blaming green levies and global costs — while wholesale prices have risen 1.7 percent in the past year and profit per customer’ has doubled... Thousands of old people will certainly die this winter...
In the Philippines the steps toward privatization of utilities, including electricity, started with the ascendance of Corazon Aquino to power after Edsa I. The first overt at was the appointment of electricity oligarch Ernesto Aboitiz to head the National Power Corp., an appointment with a clear conflict-of-interest involved as Aboitiz is part of a family that is a major power generator and electricity distributor, producer and supplier. Systematic cancellation and delay of various power projects were done leading to the power crises, the “Dark Age,” from 1989 to 1995 which justified Fidel V. Ramos’ massive Independent Power Producers contracts and later the Epira in 2001 after the ouster of President Estrada who dragged his feet on the Electric Power Industry Reform Act.
The Philippines has now had at least 25 years of experience with public utilities privatization and deregulation, it’s time we learned the lesson and change course just as many countries are beginning to do.
(Watch GNN on Saturdays, 8 p.m. and Sun 8 a.m. on Destiny Cable Chanel 8 and Skycable Chanel 213, this week “Public ownership: solving the Epira Disaster”; my emergency e-mail htlnow@fastmail.fs; tune to 1098AM Tues. To Fri. 5 p.m to 6 p.m.)
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