blank.gif (51 bytes) Rural Wrap
Two Competing Interests in Electricity Deregulation

by Dan Steninger

roving that pro-government extremists cannot be reformed and must be removed like a leach from a swimmer's leg, state regulators greeted the news of the big merger between Sierra Pacific Power Company and Nevada Power with the qualification that it will go through only if the state determines the deal to be "in the public interest."

The merger is in response to the coming deregulation of the electrical power industry. If history should turn out to be a guide, this nation's consumers of electricity are going to save between $22 billion and $92 billion a year as a result of deregulation.

Those figures come from a George Mason University study that looked at what happened to various industries after they were deregulated.

Deregulation of railroad pricing has netted consumers savings of 11 percent.

Deregulation of the trucking industry has saved consumers 22 percent.

Deregulation of commercial airlines’ prices has resulted in a savings to consumers of 29 percent.

Deregulation of long-distance phone rates have yielded savings of 46 percent, according to the report, How Much Would Consumers Benefit from Electricity Deregulation?

Applying those figures to the $200 billion electricity industry yields the projected savings of $22 billion to $92 billion, or from 11 percent to 46 percent.

Guessing that Nevada's power usage is around .8 of a percent of the nation’s total, and guessing again that the total savings is going to be around $50 billion, that means the savings to Nevada consumers from deregulation of the electricity business is in the ballpark of $400 million.

Against that savings, we have state regulators worrying over whether deregulation and the resulting maneuverings by power companies are "in the public interest."

Of course, we realize that a state bureaucrat's idea of the public interest varies a bit from what the public might consider to be its interest. For instance, the public might not see the wisdom of charging one group of power consumers extra in order to give another group of consumers a discount. That might look a lot like theft to a lay person, but it's "in the public interest" to the state officials who get to wield power by picking the robbers and the victims.

And it will be a real shame if those state officials succeed in stalling or blocking deregulation by continuing to meddle with the distribution of electrical power in order to enhance their political power through the redistribution of privately earned wealth.

When citizens hear a state regulator, politician or, my favorite, "consumer advocate," spouting off about protecting the public's interest, they ought to keep in mind that the public is the last thing on that official's mind; it's the government's interest of which he speaks. u

Dan Steninger is the editorial page editor of the Elko Daily Free Press.


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