A word from NCL: The
Alliance to Protect Electricity Consumers endorses strong support of
consumer service and protection, a primary mission of NCL and its
members. As in any coalition, the widely diverse organizations in
APEC naturally hold a range of opinions on any given issue. The
consensus stated in the Statement of Principles, however, clearly
expresses the need for careful, reasoned approaches as changes to
the electric industry are considered.
Alliance to
Protect Electricity Consumers
Statement of
Principles
regarding
Electric
Industry Deregulation
February 12,
1998
Alliance to
Protect Electricity Consumers
The Alliance to Protect
Electricity Consumers (APEC) is a coalition of highly diverse
organizations formed to ensure the positive resolution of consumer
issues related to electric industry deregulation. Our common
concerns are the potential effects of deregulation on consumers,
communities, the environment and the workplace.
Statement of
Principles Regarding Electric Industry Restructuring
This Statement of Principles
is the consensus view of APEC members regarding the specific topics
listed below. It is a presentation of facts and issues which we
recommend to policy makers and the general public for careful
consideration.
APEC
Organizations & Contacts
Cost to
Consumers
Environment
Mergers and
Market Dominance
Reliability
Safety
Societal
Impacts
Stranded Costs
Stranded
Workers
Tax Revenues
Universal
Service
Organizations and Contacts
|
Organization |
Contact Person |
Phone |
Email |
| A. Philip
Randolph Institute |
Norman Hill |
202-289-2774 |
|
| American
Federation of Labor and Congress of Industrial
Organizations |
Bill
Cunningham |
202-637-5169 |
|
| American
Federation of State, County and Municipal Employees |
Ed
Jayne |
202-429-1188 |
jae@afscme.org |
| American Public
Power Association |
Madalyn Cafruny |
202-467-2952 |
|
| Building and
Construction Trades Department, AFL-CIO |
Dick
Seelmeyer |
202-347-1461 |
|
| Consumer
Federation of America |
Mary
Rouleau |
202-387-6121 |
|
| Electric
Consumers Alliance |
Bob
Brandon |
202-331-1550 |
|
|
Friends of the Earth |
John
McCormick |
202-783-7400 |
|
| Industrial Union
Department, AFL-CIO |
Peter diCicco |
202-842-7817 |
|
| International
Association of Machinists |
Mike
Flynn |
301-967-4704 |
|
| International
Brotherhood of Boilermakers, Iron Ship Builders,
Blacksmiths, Forgers and Helpers |
Bridget Powell Martin |
703-560-1493 |
|
| International
Brotherhood of Electrical Workers |
Mike
Emig |
202-728-6060 |
|
| International
Federation of Professional and Technical Engineers |
Candace M. Rhett |
301-565-9016 |
|
| Maritime Trades
Department |
Daniel Duncan |
301-899-0675 |
|
| National
Association of Community Action Agencies |
Christine Alden |
202-265-7546 |
|
| National Consumer
Law Center |
Kay
Guinane |
202-986-6060 |
|
| National
Consumers League |
Linda Golodner |
202-835-3323 |
|
| National Council
of Senior Citizens |
Daniel Schulder |
301-578-8839 |
|
|
National Farmers Union |
Lynn
McBride |
202-554-1600 |
|
| National Rural
Community Assistance Program |
Kathleen Stanley |
703-771-8636 |
|
| National Rural
Electric Cooperative Association |
Bob
Kabat |
703-907-5641 |
|
| Oil, Chemical and
Atomic Workers International Union |
Paula Littles |
703-876-9300 |
|
|
Public Citizen |
Wenonah Hauter |
202-546-4996 |
|
| Service Employees
International Union |
Robert Masciola |
202-898-3346 |
|
| United
Mineworkers of America |
Kristin Leary |
202-842-7294 |
|
| United
Steelworkers of America |
Steve Francisco |
202-778-4384 |
|
| Utility Workers
Union of America |
Sam
Weinstein |
202-347-8105 |
|
APEC Principles,
2/12/98
Cost to Consumers
Electric rates could
increase for residential customers and small business due to
profiteering, temporary shortages, and the shifting of costs from
large industrial users to small commercial and residential
customers. Any legislative and regulatory actions leading to
deregulation or restructuring of the electric utility industry
should not proceed if lower rates for residential consumers and
small businesses cannot be guaranteed for both the short and long
term.
Where deregulation is adopted,
residential and small business consumers could face several possible
scenarios:
Deregulation will actually
increase rates for consumers in states with low-cost electricity, if
utilities export the cheap electricity and sell it elsewhere to the
highest bidder.
Predicted price decreases may
not materialize if there is not adequate generation supply and
vigorous competition in generation markets. Dominant firms will be
able to charge higher prices if there are too few competing sellers.
Residential consumers will not have the same buying power as large
industrial customers, who will have the bargaining leverage to buy
up all the low-cost power, leaving only high-cost power for
residential consumers.
Consumers will have to sift
through confusing, possibly misleading, offers of electricity
prices, savings, service options, and payment plans. They may have
to pay transaction fees to power marketers, brokers, and other
middlemen, and the related increased marketing and advertising
costs.
Whether caused by accidental
outages or insufficient generating reserves, any shortage of
electricity will drive up the market price of available electricity.
Depending on how stranded
costs are divided between utilities and classes of consumers, any
possible price reductions due to deregulation could be substantially
delayed or nullified altogether. Residential consumers of a
high-cost utility may end up paying a disproportionate share of its
stranded costs if the utility's large customers no longer buy
electricity from it.
Given these possibilities,
deregulation might not provide lower prices to residential and small
business consumers.
Consumers in certain markets
are aggregating their electricity purchases to protect themselves
from higher rates. Deregulation, however, should not require
consumers to aggregate to avoid higher costs or reduced services.
Any deregulation plan must
include,
at a minimum, the following consumer protections:
- Lower Rates.
Deregulation should not proceed if lower rates for residential
and small business consumers cannot be guaranteed for both the
short and long term.
- Competitive
Safeguards. If policymakers choose to deregulate, state and
federal regulators must ensure that truly competitive generation
markets have been created before deregulation is adopted, and
maintained afterward. To prevent the creation of unregulated
monopolies, specific definitions of what constitutes effective
competition must be in place before deregulation takes place. In
addition, state and federal agencies must update and strictly
enforce antitrust and other statutes protecting consumers.
- Protection from Price
Cross-Subsidization. To increase profits to their
stockholders, for-profit corporations with both competitive and
regulated subsidiaries may attempt to subsidize their
competitive subsidiaries by charging higher prices to captive
customers of their regulated subsidiaries. State and federal
regulators must prevent this type of cross-subsidization.
- Access to Information.
Consumers must be able to easily determine and compare the
prices for transmission, distribution, and retail energy
services and have access to information about the generation
sources of the electricity they purchase.
- Aggregation
Protection. The ability of consumers to aggregate their
electricity purchases must be protected.
- Consumer Protections.
Federal and state agencies must update and strictly enforce
consumer protection laws to ensure fair marketing, sales and
service practices. All sellers of electricity should, at a
minimum, be licensed and be subject to penalty for license
violations.
Regulators must address the
following issues raised in an environment with multiple electric
power suppliers: privacy protection; "slamming" (unauthorized
switching of providers); "pre-selling" (securing customers before a
supplier has the technical ability or legal authorization to provide
service); fair and understandable billing; clearly written terms and
conditions of service; nondiscrimination; adequate customer service
offices.
APEC Principles,
2/12/98
Environment
Environmental and
conservation programs implemented by electric power companies could
be dropped and/or would not be expanded. Deregulation could
adversely affect the environment. Funding for commercialization of
renewable resources could be jeopardized.
Current attempts to deregulate
the electric power industry make the already difficult environmental
issues even more complex. Increasing competition is already leading
to cuts in funding for energy efficiency, renewable energy, and
other utility programs that protect the environment. Deregulation
could lead to the shutdown of the most inefficient and expensive
power plants, but it could also result in marketing and advertising
that encourages greater consumption and increased emissions.
Any plan to deregulate the
electric power industry must include the following measures:
- Spending on programs to
conserve energy and increase the reliance on cleaner electric
power sources, which is already inadequate, must not be reduced.
Spending should be increased for energy efficiency and clean
energy technologies such as wind, solar, biomass, geothermal,
ethanol, small hydro power and advanced fossil energy
technologies.
- No existing generating
unit should be allowed to operate in violation of any existing
or future Clean Air Act provision or regulation.
- States and the federal
government should improve the energy efficiency of buildings and
equipment by making appropriate changes to building codes and
efficiency standards. The federal government should apply and
meet the same standards for buildings and efficiency that are
required of non-federal sectors of the economy.
- Recipients of low-income
energy assistance should not be prevented from purchasing power
from environmentally-efficient generation sources.
