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Utility Workers Cautious on Restructuring

Fortnightly Magazine - May 1 1996

Deregulation places the cost, safety, and reliability of the U.S. electric utility industry at risk. So says the Utility Workers Union of America, AFL-CIO, which represents 50,000 workers at 74 utilities. A UWUA position paper warns that competition could cause shortages and high prices: "This is the standard business cycle.... There is no reason to believe that the laws of supply and demand have been repealed." The paper proposes 11 tenets for restructuring:

s Provide competition for all.

s Respect state control. ("It is especially inappropriate for the federal government to mandate the introduction of retail competition.")

s Leave the restructuring of policy to legislators.

s Don't rush.

s Protect worker and public safety.

s Provide for stranded investments and stranded workers.

s Protect the value of investments in generation. ("Customers will receive no benefit if ... plants are shut down and prices rise to pay for new plants.")

s Preserve reliability.

s Preserve environmental and social protections.

s Encourage appropriate corporate structures. ("Existing utility companies need not be broken up or dismantled to insure that competition can exist and be fair. . . . Combinations or mergers of utilities must be examined closely to assure that service will not be compromised, nor undue market power created and exercised.")

s Protect stable prices. (em JS

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