Expertise
Deep in John Funk’s long Saturday PD piece about electric utility “deregulation”, we find the following:
No matter how this plays out, residential customers can expect rate increases. Few listen to Ohio Consumers Counsel Janine Migden-Ostrander, who argues that negotiated rates preferred in the Strickland bill should be tested against market prices. She says downstate consumers probably would be better off with regulated prices while customers paying FirstEnergy’s rates might actually get a break with market prices. Merchant power companies enthusiastically agree.
The situation is eerily familiar to Kenneth Rose, a nationally recognized deregulation expert in Columbus.
“What is interesting is that Ohio is fitting into the same pattern that you see over and over,” said Rose, who spent time in Illinois after deregulation blew up in the faces of state policy-makers this year and produced a 30 percent to 50 percent rate spike, depending on the utility, after a 10-year rate freeze.
“There is always a group that thinks their state is different,” he said. “Even when the circumstances are very similar to other states, they believe it will somehow work out differently. Usually after the rate caps come off, they end up with a large increase.”
I’m sure Kenneth Rose is a smart guy, having worked for OSU’s National Regulatory Research Institute and the Argonne National Laboratory before going into the consulting trade. I’ll take Funk’s word for it that Rose is “nationally recognized”. But wouldn’t you like to know who’s paying his consulting fees at the moment before accepting, at face value, his airy dismissal of the Consumer Counsel’s analysis?
And wouldn’t you like to know why the Ohio Consumers’ Counsel thinks what she thinks — since she is, after all, the state’s official advocate for our interests and has a staff of lawyers and analysts to help her figure this stuff out?
Well, since Funk couldn’t be bothered to tell us, here’s Migden’s own testimony on the subject before the House Public Utilities Committee, on November 14 (history of deregulation) and November 28 (Senate Bill 221).
Even more interesting, the market-based generation charges that resulted in the Illinois “rate shocks” — averaging 6.4 to 6.5 cents per kwh, according to the CUB — would actually reduce First Energy bills if applied to CEI, Toledo Edison and Ohio Edison rates after “stabilization rates” end in 2009-2010. Which is kind of what Migden has been trying to tell us.
But for some reason I can’t find that information in the PD article.