Electric utility reform: who's watching out for consumers?

• Author: Schaefer, Dan

Part of being an American means having the freedom to choose where, when, and how to spend one's money. Whether buying essential items or the luxuries of life, the free market provides those choices. Companies fight for business by keeping prices low, providing good customer service, and constantly improving products.

Yet, American families are denied the right to bargain shop for one of the largest expenses in their budgets after housing and food--the monthly electric power bill. All consumers must pay that bill, but have virtually no control over the size of it. Short of sitting in the dark, their only choice is to write a check for whatever amount the local monopoly bills them.

Outdated, century-old state monopoly laws protect local utility companies from competition. Because of those laws, it currently is illegal for most consumers to comparison shop for their electricity provider. All of that could change, though. Consumers are beginning to demand the same power of choice over electricity they have over other essentials of life. They are starting to realize that they can save money--if only they are given the chance to put the free market to work.

I have introduced legislation (the Electric Consumers' Power to Choose Act of 1997--H.R. 655) that would give all consumers--large industrial, small business, or residential--the ability to choose who provides their electricity by Dec. 15, 2000. Consumers still would be hooked up to the local utility's distribution wires, but would be free to decide which company provides them with electricity.

Nationwide, the potential savings from injecting such competing forces into the electricity generation business is huge. It could mean nearly $200,000,000,000 more in economic growth annually, over 1,000,000 new jobs, increased productivity, higher wages, and a big boost to the competitiveness of American-manufactured goods.

As the debate over electricity restructuring heats up, consumers are starting to be hit with a lot of rhetoric by those who wish to delay the coming of competition. Many of the arguments are fictions that should be refuted by the facts.

Fiction: The free market won't deliver electric power to some consumers because they are "too small" to serve and thus will be ignored.

Fact. Such claims have been proven wrong when made for every other service that has been deregulated and are just as mistaken in the case of electric power. The residential electricity market is two and a half times...