If New Mexico doesn't voluntarily deregulate utility options for consumers, the Federal Government
will step in.
In New Mexico the utility industry have their alliance where they strategize.
We utility consumers should, also, band together and conduct collective bargaining with the
gas and electric industries.
Instead of take-it-or-leave-it, we utility consumers should have options.
Deregulation should NOT include us consumers having to cover the losses of the wealthy who
speculated in the stock market and bought utility stock.
Utility Deregulation
Congressional legislation is intended that would force deregulation on states
that don't have competitive markets. In New Mexico, the recently proposed electricity utility deregulation only
refers to the choice of which electrical energy generation you purchase. It's intended to get underway January
1st, 2003. Consumer, industrial, utilities and other groups are waiting to see what the proposal includes.
It's only power generation that will be deregulated. Retail competition would
be injected into New Mexico's electricity market. You can pick your power provider. So, your electrical energy
options could come from
nuclear,
coal,
hydroelectric,
wind,
solar,
fusion,
ocean thermo-layer energy conversion,
zero-point energy collection,
or hydrogen when it becomes affordable.
Gregory Green, executive director of New Mexico Electric Switch, says "Some
portion of education, industrials and residentials should all go at the same time to really attract the lower prices
and competition."
Big businesses are the prizes that energy suppliers want to target. While a
large factory can be monitored by one meter, a neighborhood of houses requires a meter for each house and a separate
bill, placing a lot more demand on the utility supplier.
We have to be alert for utility suppliers practicing "cherry picking,"
offering bargain rates to industrial consumers while charging premium rates to homeowners and small businesses.
"Stranded Costs?"
But there's a little snag. The wealthy are trying to get wealthier. Look out. They're targeting
your wallet.
They've concocted a bogus concept. They call it "stranded costs."
You won't find too many folk in a welfare office mentioning their "stranded costs."
The Public Service Company of New Mexico and other utilities, such as El Paso
Gas & Electric, claim that they won't be able to recover their prior facility investments once the market becomes
competitive. PNM states that their investors deserve to recover 100% of their expenses that went toward building
power plants including the Palo Verde nuclear plant west of Phoenix, AZ. Currently, utilities are paying those
investments with revenues collected from rates.
When deregulation comes, the public shouldn't have to bear those prior investment
costs. Regulatory compacts do NOT make guarantees to investors. Notify your state legislators to remind them that
investors who have bought utility stocks indulge in old fashion speculation.
When you left your "stranded costs" on the casino table, did the
dealer give you the option to retrieve your chips from the table?
When you hear of "stranded costs." just be warned that any strangled
costs added to your utility bill is going straight into the pockets of wealthy utility stock speculators.
PNM should get out of the power generating business and just be responsible
for the transmission infrastructure. In a competitive market, a utility that owns the power plants AND the distribution
infrastructure, lacking neutrality, could make it difficult for other companies to run power through the grid.
PNM could create a power generating affiliate that could be regulated so that PNM couldn't exert unfair advantage.
Rural Electric Cooperatives
The poorest New Mexicans pay the highest utility rates. 20% of utility consumers in New Mexico
are members of one of the local rural electric cooperatives. Though their collective bargaining with the utility
companies is to their benefit, they're still stuck with utility rates which are 40% above the national average.
Labor benefits from collective bargaining when their union representatives
negotiate labor contract renewals with the reps from management.
As in California and Illinois, we energy consumers can benefit if we unite
and conduct collective bargaining regarding our gas and electricity rates with the utility industry alliance.
Besides collective bargaining for the best rates for electric generation, we
could haggle for natural gas and propane gas.
CoOp Gas Stations
Our one cooperative venture could be our SUCU coop gas stations. Once a year
your account would be credited for your share of the profits from the prior fiscal year based on the volume of
your purchases during that year. (Us gas coop members would benefit whenever non-members, such as long distance
truckers and other travelers, purchase at our gas stations without a membership.)
Please join us
We should save on our utility bills with deregulation IF we keep out "stranded
costs" and if all New Mexicans join the SUCU for collective bargaining with the utility industry. Please join
us.
SUCU Organizers
The characters spearheading the Statewide Utility Consumers Union are:
Andrew Homer -
Green candidate for New Mexico State Rep - District 26
John McCall -
Green candidate for New Mexico State Attorney General
Cliff Bain -
Green candidate for the Public Regulation Commission
Statewide Utility Consumers Union
PO Box 8244
Albuquerque, NM 87198-8244
Electric Choice Welcome, Confusing by Tom McGhee Journal Staff Writer Sep 6, 99
New Mexico, so far, is taking the right steps toward electric competition that will allow residents
to shop for the best deal among power providers, a consumers' survey of state residents shows.
The poll, by the Indianapolis-based Electric Consumers' Alliance, also found that many consumers still find the
prospect of change confusing.
The group polled 500 adults in the state in July to determine their attitudes toward deregulation of the electric
industry. Consumers polled said they want a number of the provisions included in a bill signed earlier this year
by Gov. Gary Johnson. The legislation will open the electricity market beginning in 2001.
The study, performed by Market Strategies Inc., a Dearborn, Mich.-based polling organization, found:
* 84 percent of consumers want to be able to choose their power supplier;
* 88 percent said they want their choices to include their present supplier;
* 61 percent said they would consider switching providers without being prompted or forced;
* 70 percent said they believe states, not the federal government, should lay out rules for choice;
* 50 percent said the ability to choose was more important than an immediate rate cut;
* 43 percent said a rate cut is more important than choice. The restructuring bill passed by the 1999 New Mexico
Legislature will let consumers choose a supplier if they wish or stay with their present utility.
And the Public Regulation Commission recently approved a $34 million electric rate cut for the Public Service Company
of New Mexico, the state's largest power utility. Congress also is working on federal deregulation legislation,
but the majority of those polled said they don't believe any federal law to open electric markets should override
rules put in place by states. Rep. Heather Wilson, R-N.M., said most members of Congress recognize that states
should set their own rules.
But there are issues in restructuring that will affect interstate commerce and it is up to the federal government
to create legislation to deal with them.
Wilson is a member of the House Commerce Committee's subcommittee on Energy and Power. She expects a federal deregulation
bill to be introduced when Congress returns from its summer recess on Wednesday.
The survey of consumers didn't ask about the most contentious issue facing regulators as they draft rules for the
new market -- stranded costs. Most of those costs in New Mexico are attached to PNM's construction costs to help
build the Palo Verde Nuclear Generating Station west of Phoenix. The utility doesn't expect to recoup those costs
in a competitive market.
The state competition legislation guarantees utilities can collect at least 50 percent of those costs through a
special "wires" charge built into rates. Whether or not they collect more will be up to the PRC, which
can allow up to 100 percent recovery.
It is perhaps the single most important issue confronting the PRC as it designs rules for competition. But the
alliance thought questions about that issue would confuse consumers. Bob Johnson, the alliance's executive director,
said "people don't know what stranded cost is, so we didn't ask about it." In fact, the study found that
57 percent of those polled were not very familiar with electric restructuring and competition.
Most respondents also said they expect consumer protection issues to arise once the market is opened. And 70 percent
said they believe that if power line maintenance, meter reading and billing became competitive, customers would
be confused as well. New Mexico has not deregulated those services but could consider it in the future, said Dennis
Gee, director of the PRC utility division.
The Electric Consumers' Alliance polled consumers in six states, five of which are in the process of opening the
electric market. Besides New Mexico, the states were: Texas, Illinois, Ohio, Maryland and Florida. Only Florida
has yet to pass deregulation legislation. Findings were "remarkably" similar in all the states, the alliance's
Johnson said: "Consumers want choice, but they want it to be on their own terms."
The group is sharing the results with the congressional delegates from the states it polled, he said. The states
were also chosen because of the involvement of members of their Congressional delegations in deregulation issues.
Both Wilson and Sen. Jeff Bingaman, D-N.M., are involved in electric restructuring.
The study shows that while people are interested in deregulation, the issue hasn't generated a ground swell of
support. The drive to competition is being pushed by the industries that will benefit most from a change, Johnson
said. The Indianapolis-based Alliance is made up of 275 consumer groups in all 50 states, including the National
Council on Aging, the Center for Public Interest Research and the National Farmers Union.
Johnson, a former consumer advocate, said the 5-year-old alliance acts as a clearinghouse for information, passing
it along to members. "Our mission is to do a much better job of educating consumers to take advantage of the
market place," he said.
The group will take part in discussions and provide information to the New Mexico commission as members develop
rules for competition. The alliance may also sponsor public meetings on deregulation in the state, said Johnson.
