PHILADELPHIA -- Enron made an enemy of consumer activist Lance
Haver last October when it offered to cut Philadelphia electricity
rates by 20 percent.
Naturally, Haver didn't oppose a rate cut. He and other
activists, along with government and industry officials, spent
negotiating with Peco Energy, Philadelphia's electric utility, to
residential rate cuts of up to 10 percent.
What he feared was that Enron's maneuver would give regulators a
reason to reject the carefully negotiated Peco plan for opening
Philadelphia's power sales to competition, and eliminate any
guaranteed rate reductions.
He was right. The Pennsylvania Public Utility Commission turned
down Peco and Enron's proposals, and adopted rules it said would let
competition reduce rates without mandated cuts.
"It hurt," said Haver, head of the 3,000-member Consumers
Education and Protective Association. "It was very, very damaging to
the consumer's interest."
It wasn't supposed to be this way. Consumer advocates were
expected to be some of Enron's biggest allies in the push to end
With a combination of high-profile television advertising and
sophisticated lobbying, Enron is trying hard to convince rate payers
and legislators alike that removing regulatory controls from the
million-a-year U.S. electricity market will save consumers money.
Yet from Pennsylvania to Oregon, where many worry that
deregulation will lift rates by sending low-cost hydroelectric power
to California, consumer advocates are joining with utilities and
politicians to hinder Enron's crusade.
In most cases, Houston-based Enron has the backing of businesses,
especially large industrial users, in its efforts to move rapidly to
competition. Big consumers of electricity can negotiate much lower
rates in a deregulated market.
Yet activists fear competition will hurt residential customers if
rate cuts aren't written into deregulation laws. Without the
guarantees, electric companies will charge small customers more to
make up for the lower returns from industrial customers, activists
"It's the customers who are able to be served at a lower price
that will want the competition," said Sam Peltzman, an economics
professor at the University of Chicago's Graduate School of
Public Citizen, the Washington-based consumer advocacy group,
supports the concept of opening the electricity market to
competition. It just doesn't share Enron's faith that moving quickly
offers much to consumers.
"We're very queasy about deregulation," said Charlie Higgins, a
Public Citizen policy analyst. "There's big problems with the
current system, but the proposals put forward by Enron won't
necessarily benefit the consumer."
Enron is used to such criticism. Once simply a regional natural-
gas pipeline company, Enron steamrollered rivals in the 1980s to
become the largest U. …