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Today's critics decry stranded costs, yet fail to cover their tracks.
Many of today's most vociferous critics of stranded cost recovery were once among the most ardent supporters of the nuclear plants they now disavow.
Back in the '70s, when electric utilities and regulators laid out their long-term plans, nuclear power played a leading role, and American industry largely concurred. Now, however, 20 years later, the business sector sings a new tune. "I told you so," the refrain goes.
Profits and lower rates are nothing to sneeze at, especially for high-volume electric consumers like Ford and Dow Chemical. But how does one explain the about-face of a group like the Heritage Foundation, the Washington think tank now pushing for electric deregulation?
In 1978, the Heritage Foundation decried cancellation of nuclear plants: "Without nuclear power we will be unable to maintain the level of economic growth necessary to ensure that all Americans will have an opportunity to fulfill the promise for the American Dream." A generation later, and the group had forgotten both its heritage and its foundation: "[S]tranded cost recovery is difficult to justify. ... Utilities ... argue that they have made investments in good faith ... little substantive evidence can be offered by these utilities."
When major industries, policy groups and analysts reverse field, after utilities have spent billions of dollars at their urgings, the least they can do is own up to their responsibility. What will these intellectual chameleons say during the next oil embargo, coal strike, drought or fuel shortage? In two decades will they tell us we should have listened to them and never deregulated?
The inter-generational linkages in this nation are growing more tenuous. Blatant hypocrisy from our leading businesses and thinkers only serves to weaken the ties that bind. t
Frank Clemente is senior member of the graduate faculty at Penn State University. He has presented his research findings on energy in professional journals, public conferences and testimony before various utility commissions.
What Did They Say, and When Did They Say It?
In the '90s In the '70s
We warned you:
• "Industrial consumers have long warned that electric utilities were wrong to overbuild generating facilities to maintain excessive reserve margins." (em American Iron and Steel Institute, Electricity Consumers Resource Council, and the Chemical Manufacturers Association, testimony before the FERC, December 1994.
We didn't ask for it:
• "[I]t is not fair to ask retail customers to bear the full burden of a utility's stranded costs. ... They did not ask for, support or sign for the high cost nuclear plants ... [and] actually opposed such high-cost projects when they were originally conceived." (em Ford Motor Co., representing ELCON,* before U.S. Senate Committee on Energy, March 1997.
• "For companies in the chemical process industries whose plants run on big inputs of electrical energy, the outlook is now marred. ... During the next decade or even longer, unavailability of low-cost electricity may prevent them from adding new capacity when and where they want. Reason: Many large utility companies have been postponing major projects for additional generating capacity."