Utilities Monopolies May Be Ending If Deregulation Comes, Users Will Have to Shop Around

By Lesley Rogers Of The Post-Dispatch | St Louis Post-Dispatch (MO), February 24, 1997 | Go to article overview

Utilities Monopolies May Be Ending If Deregulation Comes, Users Will Have to Shop Around


Lesley Rogers Of The Post-Dispatch, St Louis Post-Dispatch (MO)


Like most people, Bill Brinson of Edwardsville doesn't give a second thought about the economics or politics behind flipping on a light switch.

But if the electric utility monopolies in Illinois and Missouri are forced into the open market, Brinson and everyone else could be asked to choose their electricity suppliers.

Some consumers' electric bills could drop by hundreds of dollars a year. But they may have to shop around for the cheapest costs, sifting through an avalanche of ads, similar to what happened after deregulation of the phone industry in 1984. Brinson, like most residents of the Metro East area, is served by Illinois Power Co. Its rates rank second-highest of the four companies that have 85 percent of the power business in the state. So Brinson stands to save money in a deregulation. But he's aware of potential hassles. "I almost dread the thought of utility deregulation," said Brinson, 42, who lives in a four-bedroom house in Edwardsville with his wife, Patty, and their three children. He is manager of photographic services at Southern Illinois University at Edwardsville; she is a teacher. Together they earn about $60,000 a year. Illinois' electric companies are battling over how to deregulate. Congress is considering legislation that would require the 50 states to deregulate. The bill most likely to pass sets a 2001 deadline for deregulation. If the states don't come up with their own plan, the federal government may force one on them. The Missouri Legislature is expected to look at several proposals this year. Electric monopolies divide the states by regions. Under most of the deregulation proposals, Brinson would be able to choose from any of the state's major electric utilities, or from a nationwide electricity wholes ale supplier. That power would be routed through the existing power lines, with the companies "renting" the lines from each other to reach their new customers. "Utility deregulation will offer consumers lower electricity prices, increased choices and reliable service they can count on," said Ed Cobau, spokesman for Central Illinois Public Service in Springfield, which is merging with Missouri's Union Electric. The state's utilities agree - reluctantly, in some cases - that deregulation is going to happen. But the main players in the consumer choice debate are divided about the details, especially the question of whether an open market should be immediate or phased in. "Deregulation is inevitable, especially since there has been talk of doing it at the federal level," said Jennifer Eidson, a spokeswoman for the Illinois Coalition for Responsible Electricity Choice, a coalition of major utilities and business organizations. "It's not a question of if Illinois should deregulate or not. It's a question of how." Illinois Rates High Electricity rates in Illinois are about 30 percent higher than the Midwestern average, mostly because of poor planning and bad investments in inefficient nuclear plants, says the Citizens Utility Board, a consumer advocate group. The state also has large cost disparities among regions and electric companies, varying by as much as 4 cents per kilowatt-hour from one area to another. …

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