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Contents this page were published in the May/June, 1997 edition of the Washington Free Press.
WFP, 1463 E. Republican #178, Seattle, WA -USA, 98112. -- WAfreepress@gmail.com
Copyright © 1997 WFP Collective, Inc.
Reaping the Fruits of Deregulation
This year's City Light rate request was fueled by electrical industry deregulation resulting from the passage in 1992 of the National Energy Policy Act. Previously, electrical utilities operated as closely regulated monopolies. In the Northwest, where we have plentiful hydro power, that system worked well, giving us rates that are the lowest in the country. Yet industry-backed pundits are trumpeting deregulation as a surefire way to lower electric rates. The guaranteed result will be that Wall Street will cash in on windfall profits, with big business electric customers shifting much of their power bill onto everyone else.
Here is how it works. Deregulation has resulted in the development of marketers who sell power nationwide, allowing large companies to shop nationwide for the cheapest rates. With pending changes in the U.S. Congress and in Olympia, these practices may be greatly expanded. These power marketers, backed by big financial interests, are forcing public utilities to search for ways to lower rates to avoid being cut out of the new market. And the easiest way to do this is to shift the cost burden from big business to all other utility customers.
In Seattle, the big industrial users blackmailed the City Council into lowering their rates with the threat that otherwise they would jump ship to another supplier. Never mind that the laws prohibiting such robber-baron tactics have to be repealed first. (This repeal threatened in Washington, D.C. as we write, and though a bill to deregulate rates just died in Olympia, it is likely to be back next year). Forget that businesses aren't about to switch soon anyway because City Light's rates, even under the old rate structure, were already the cheapest in the country. The giants carried enough political clout to get their way, especially since neither of the daily papers informed the public of what was going on.
In response to these threats, City Light obligingly decided that higher rates for residential customers were "fair" because residential customers are more expensive to serve per kilowatt hour. This is in spite of the fact that the highest-use industrial and commercial customers incur by far the largest fixed costs: big customers require large substation transformers and equipment, or high-capacity underground wiring systems like those in the Downtown, First Hill and University District areas. They also are provided with an entire unit of Account Executives, whose sole purpose is to cater to the whims and desires of the 150 largest customers.
At the Rate Advisory Committee's recommendation, the City Council also tacked on the Residential Customer charge. The customer charge is a reactionary "flat- tax" that hits lowest income people the hardest, particularly since it is levied solely on residential ratepayers.
Time to Defend Public Power
What is really at stake here is the very notion of public power, started 95 years ago right in Seattle. Control is being taken away from the residential citizen-owners, those with the most stake in a public system. In the '60s and '70s, groups like the Light Brigade and poverty rights advocates pressured the City Council to keep rates in check for this majority. They won such concessions as a spot on the Rate Advisory Committee, which is supposed to give citizen input during the rate setting process. That committee has become completely dominated by big business interests who couldn't care less about homeowners or people on fixed incomes.
Citizens fought huge battles at the turn of the century against the original Robber Barons to achieve public power. Deregulation and cost shifting is the first step in an industry campaign to privatize public power. Make your voice heard before the City Council to stop this corporate welfare, and tell the state and federal legislators that you are watching them, too.
Nick Dreyer is an Energy Research and Evaluation Analyst in the Rates Unit and Megan Cornish is a Senior Power Dispatcher at Seattle City Light. Dreyer and Cornish are members of the Committee for Equal Rights at City Light (CERCL), which can be reached at (206) 725-5434. This editorial was submitted to the Seattle Post-Intelligencer, but was not deemed newsworthy by the P-I.
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