Regulation or Technology? Low-Income Electric Customers and the Transition to Competition

Fortnightly Magazine - November 15 1995
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Twenty-five centuries ago, 300 steadfast Spartans, defending their sacred Greek turf, held up Xerxes's Persian army at the pass at Thermopylae just long enough for the Persians to lose the opportunity to conquer Greece. The world would have been quite different if the Spartans had just "given way."Contemporary state public utility regulators number just about that of those plucky Spartans. They too are defending their sacred ground. Like Xerxes's army in 480 B.C., American electric utilities today are trying to squeeze their way through a perilously narrow passageway. They are being pushed from behind by the force of competition, which is as tough a master as Xerxes ever was.

Will electric utilities, seeking the flexibility necessary to prevail in the competitive market, be delayed so long that they too lose the war?

Protecting the Residential

Customer

The sacred ground many regulators believe must be protected is the network of rules and regulations designed to protect residential customers from abuse by a monopoly utility service provider. Often, these rules and regulations have developed a special emphasis on the low-income customer, considered particularly vulnerable and in need of protection. Virtually every current utility regulation is held in place by three related regulatory predispositions:

s the expectation that a utility will do its best to extract monopoly profit from customers and take advantage of them because they have no alternatives, or only very expensive ones

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