States of Denial

Deck: 

Three challenges to federal authority from those unhappy with the status quo.

Fortnightly Magazine - January 2007
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First the news. The latest spin on electric restructuring came on “cyber Monday”—that first Monday after Thanksgiving, when America’s silicon nation goes online to shop for Christmas.

That’s when the American Public Power Association (APPA) released a study by economics professor Dr. John E. Kwoka, of Northeastern University, that reviewed a dozen other recent studies on the subject and found so many deficient statistical techniques as to question whether utility restructuring had made consumers any better off. (John Kwoka, Northeastern Univ., “Restructuring the U.S. Electric Power Sector: A Review of Recent Studies,” APPA, November 2006.)

“Too little is known,” added APPA President and CEO Alan Richardson, “to conclude that our industry is on a path that can or will produce customer savings.”

The study (funded by APPA) gained notice almost immediately from bloggers and pundits. Only a week earlier, LECG Consulting had released an opposing report finding modest retail rate reductions (from $0.50/MWh to $1.80/MWh) in the mid-Atlantic region for the years 1998-2004. (Scott M. Harvey, Bruce M. McConihe, Susan L. Pope, LECG, Nov. 20, 2006.)

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