Public Power in a Competitive Electricity Market

Fortnightly Magazine - July 1 1997
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Subsidies? Maybe. But how about reciprocity? Should Congress let PMAs, munis and co-ops decline open access?

Until recently, most congressional debate on utility deregulation has focused on the future of investor-owned utilities and independent power producers and marketers. Lobbyists for government-owned or cooperative-owned power companies have tried to downplay their clients or to seek exemptions. Yet as the electricity industry is opened to competition, lawmakers cannot ignore public- or government-owned power companies, which supply 25 percent of the nation's electric consumers. They should not exempt some of this nation's largest utilities from competition. Most important, they should not prohibit public power's consumers from enjoying the benefits of competition.

Restructuring legislation must address public power, if for no other reason than that it represents a significant segment of the electricity industry. In this era when lawmakers want both to advance competition and to cut the deficit, the federal government's own power entities, Bonneville Power Administration and the Tennessee Valley Authority are particularly vulnerable to reform.

The electricity market has changed substantially in the last 70 years. It will change even more in the next few years. TVA and the power marketing agencies, just like the rest of the electricity industry, must change as well. The status quo is simply too expensive for both taxpayers and ratepayers.

It's the Ratepayer's Loss

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