Despite a steady decrease in the wholesale price of power in our country over the past decade, the retail rates charged by the large utilities have soared. We’ve learned recently that South Carolinians pay the highest electric bills in the nation, an average of more than $1,700 annually per household.
This is not surprising: Economics 101 teaches that whenever the producer of something has a monopoly and the consumer has no choice, the quality of that something decreases and its price rises.
Here in South Carolina, however, instead of letting competition from other power producers keep the large utilities in line, the Legislature has placed the consumers’ fate in the hands of the Public Service Commission.
And that’s disastrous. Simply put, the relationship between the PSC and the large utilities is nothing short of incestuous.
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There are several bills now pending in the General Assembly to “reform” the PSC, but unless and until we open up our state’s energy market to other providers, consumers will get no real relief. Passing S.890, a bill I filed a couple months ago, would be a modest step in that direction. It would: 1) require the large utilities to buy wholesale power from independent power producers if the independent power producers can build the power cheaper than the utilities; and 2) require those large utilities to then pass on the resulting savings to consumers.
Not surprisingly, even this small step has been met with resistance by the large utilities; they’d rather sell consumers the expensive electricity they generate, rather than resell lower-cost alternatives. The large utilities’ lobbyists are somehow able to argue with a straight face that, yes, their clients should be allowed to keep their service monopolies, and no, they shouldn’t be required to purchase and resell independently produced power if such would save consumers money.
This is unfair; if large utilities are going to have monopoly service areas — which is poor public policy, but one most legislators apparently still insist upon — then they must be required to purchase and resell independently produced power if that would save consumers money.
For lawmakers to let what has happened at V.C. Summer go without any effort to open our state’s energy-production markets is unthinkable. Please contact your state lawmakers and urge them to support S.890.
Sen. Tom Davis
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