OPINION
Maximum Utility How to keep PGE and US West working for all of us The full text of the PUC's order rejecting PGE's proposed Customer Choice plan can be found at www.puc.state.or.us. One of the most discouraging developments of the past decade is the shift in Oregon's tax burden, moving a substantial sum off the backs of large corporate interests and onto the shoulders of average taxpayers. Now efforts are under way to achieve a similar shift with our utility bills. A number of the companies that sell us essential services are pushing for changes that could well lower prices for big consumers and raise them for the rest of us. PGE, the electric utility that serves some 650,000 customers in Northwest Oregon, offers a case in point. A little over a year ago, it proposed an innocuous-sounding plan to "restructure" operations. PGE's application to the PUC called for eliminating its supply function by selling off dams and gas- and coal-fired plants. The idea was to open up the market to competition on the supply side--and thus lower prices--while maintaining a monopoly position transmitting and distributing electricity. Last week, the PUC denied PGE's application. In the process, the commission laid out a central fact of life in competitive utility markets: While the size and experience of industrial and commercial customers "give them a strong negotiating position...residential customers...may be vulnerable because they have little knowledge of the utility business and little power to negotiate." The PUC's sentiments, echoing principles voiced by Gov. John Kitzhaber two years ago, take on greater significance in light of US West's renewed attempts to escape from regulation. An article in last Wednesday's Wall Street Journal makes it clear that there's a better way to deal with the phone company. As Rob Eure and Rachel Zimmerman report, "Idaho has a message for Oregon and Washington as US West Communications Inc. pushes for local telephone deregulation: You're not asking for enough." In return for less regulation, principally on rates, US West is promising to offer advanced communications services. That is, in order to provide improved service to more sophisticated customers, the company wants to charge all of us more. Compared with Oregon and Washington, Idaho is "fully wired" already. As the Journal points out, regulatory officials there got tough with the phone company long ago. Yes, they reduced rate regulation, but only on the condition that US West give back 40 percent of the resultant profits. Some of those profits paid for rate relief for small customers, while the bulk of them helped upgrade Idaho's phone system. Along the way, the Journal notes, Idaho's PUC "maintain[ed] controls on the rates charged to residential customers and small businesses with up to five lines." Let's hope the Oregon Legislature follows the basic lessons of these
two examples as it deals with all manner of utility measures this session.
It is both possible and desirable to open markets to competition while
ensuring that basic services remain reliable, safe and fairly priced
for all customers. - - - - - - - - - - - -
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