Public Power: An Inexpensive Insurance Policy Against Consolidation

Fortnightly Magazine - September 1 1997
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An Editorial Response:

Some critics wants PMAs out of the electric business. But that could leave market power to a few, large monopolies.

Department of Energy Secretary Federico Peña observed in an address at the recent annual meeting of the Edison Electric Institute: "The [electric utility] industry is incredibly diverse, with investor-owned utilities, municipalities, cooperatives, the federal power system, independent power producers, marketers and others. And the challenge we face today is to respect those complexities - not to underestimate them."

Richard Munson should have heeded this advice in writing his piece on "Public Power in a Competitive Marketplace," (PUBLIC UTILITIES FORTNIGHTLY, July 1, p. 24). Unfortunately, rather than respecting these complexities, as counseled by Secretary Peña, Mr. Munson has ignored them.

The logical starting point for any examination of public power in a competitive market should be a careful definition of the term. A careful discussion of the specific characteristics of the diverse entities often lumped under this definition should follow. Instead, Mr. Munson's polemic against "public power" is based on a gross misunderstanding and many mis-statements about what public power is and what role it has played and will continue to play in a competitive market.

Getting it Right

Rep. Ralph Hall (D-Texas), ranking member of the House Energy and Power Subcommittee, clearly understands the importance of getting the definitions right. In his opening statement at the subcommittee's July 9 hearing on public power, the Tennessee Valley Authority and the Pacific Northwest, he had this to say:

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