Eden Cut Electric Power Rates 10%... Or Did It?

Written by Ralph E. Shaffer

Thursday, 22 February 2018

The Public Utilities Commissioner looked pleased as he prepared to announce the long-anticipated reduction in Eden's electric rates.

His audience, mostly utility officials, eagerly awaited word that deregulation had arrived.

Scattered among the onlookers were the legislators who had ended regulated monopoly after nearly a century and had sold the deal to the public by mandating lower rates.

Hardly noticeable in the crowd were a handful of citizens, members of a consumer group that had fought for years to achieve fair rates for residential users.

Somewhat apprehensive, they suspected the forces behind the scheme were not really interested in the people's welfare.

"I'm pleased to announce that the change in the method of supplying power in Eden, and the charge for that power, is now in effect." The commissioner's words, spoken as though he was solely responsible, elicited cheers from most of the audience. Skeptical consumers waited for the details.

"Until January, Edenites paid rates 50% higher than the national average. On Jan. 1, residential customers and small businesses saw their monthly electric bills drop 10%. The legislature has required another 10% reduction in two years, and rates are expected to fall 25%-30% thereafter."

The commissioner's remarks momentarily reassured the skeptics. But as he continued, their doubts returned.

"This will not come easily, without some slight bumps along the way. To have delayed the introduction of this great reform because of a minor glitch or two would have been a colossal economic disservice to Eden. Your commissioners, pledged as we were to achieve an immediate 10% drop in your electric bill, have accomplished that with but little inconvenience to the residential consumer."

"Well, hold on," exclaimed one consumer, standing and waving his latest utility bill in the air. "I used the same amount of electricity last month as I used in December and my bill isn't ten percent lower, it's higher."

"No, no, you're wrong, there," responded the commissioner, a bit annoyed. "Look beneath the sub-total under 'Energy Charge' and you'll see a line - 'Legislated 10% rate reduction' - subtracted from your bill. We promised to cut the cost of power 10% and we did it." A self-assured smile crossed his face.

"But," protested another consumer, "you've charged me more than 10% for something called a 'Trust Transfer Amount.' I didn't transfer anything."

The commissioner, still in that self-assured manner, answered. "That item permitted the utilities to cut the charge for power production. It will pay off a bond issue, enabling the companies to renegotiate old loans and lower the interest rates they pay so they can cut power rates even more."

"But the utilities aren't paying off the loans," shouted yet another consumer, rising angrily from his seat. "We, the home owners, are forced to pay it off through this trust transfer amount. And how long will it be before I get a notice with my bill announcing that the company is seeking to raise rates again?"

"An increase is unlikely," the commissioner shot back, offering a lesson in economics. "Competitive markets produce competitive prices, and lower rates provide us the ultimate benefit of exponentially enhancing Eden's economic viability as businesses choose to remain, or relocate, here."

By now consumer advocates were squirming in their seats. Why all this talk about economic viability? Why the emphasis on business?

"Besides," the commissioner continued, "while there will be a small number of bad actors, as in any industry, your commission has taken steps to ensure that only companies that meet the highest standards are authorized to supply electricity in Eden. A variety of consumer protections are now in place to prevent unauthorized switching of customers from their chosen provider to another one.

"Competition inevitably brings new, improved products. Competition means choice, and consumer choice drives the growth of the free market..."

"Oh," interrupted one impatient consumer, "you mean Eden Gas and Electric will give us better electricity? The quality of their volts will be improved? They'll offer more amps per kilowatt? Maybe their electricity will travel faster, be more powerful? "

Ignoring this, the commissioner went on: "We were pledged to deliver a 10% reduction in the cost of power and that is exactly what we did. To do that we had to relieve the utilities of a portion of their debt burden. It's only right that Eden's consumers pay their fair share."

"Fair share?" another outraged dissident shouted, standing with clinched fists. "Fair share? When did the utility companies ever care about our paying a fair share? We, the people of Eden, were never told about a 'trust transfer amount' when the legislature adopted deregulation and ordered this phony 10% rate cut. All we heard was that rates would fall 10%, and how good this would be for the 'business climate.' Well, I'm all for business, but how far does that go? I'll bet business will get more than a 10% cut and pay less than their 'fair share' of the trust transfer amount.

"I think the real purpose of this legislation is to let the big utilities devour municipally-owned utilities such as Eastern Eden Water and Power." Turning to his fellow consumers, the angry rate payer roared, "By Jingo, boys, we're a bunch of damn fool suckers, We've been had."

With this, the meeting dissolved in chaos. The commissioner ineffectually banged his gavel repeatedly, then hurriedly left the podium. Legislators and executives were heard murmuring something about rabble rousers and communists. The handful of consumers, bewildered and frustrated, headed for the nearest fax machine or logged onto social media. It was time to take matters into their own hands.

The story above is a satire or parody. It is entirely fictitious.

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