<br />.
<br />
<br />le<'1 againsl anuses and, In essencc, 10 suh,lilll'" for Ihe missing pres-
<br />slIres of compelition. However, Ihe experienc,' of Ihe paSI fiily years
<br />has dernon.strated Ihal regulation has in general heen a poor suoslilule.
<br />For a numher of reasons, ulilily c,)mmissi'-,n.s h;".c often pron~1I In he
<br />ineffeClive in regulating IIlililY scn ke and ra((:s. ~loremw, external
<br />regulation creales a sel of relalively rigid guideline, '\ IIIch do an imper-
<br />fecl jnh of simulaling Ihe reglllalllrl' cfkcb 0/ " ,.olllpelili,.e lIlarkel-
<br />plaec. The game is nOI Company A trving [<, prmid,' hCl!er s<~".io:e at
<br />lower prices Ihan all "iher companies, bu[ ralhl'l Compan; .'\ allcmpt-
<br />ing In ,eenre the highest rate Ihe rcgula!nn "..,hes will pCrll,il. Slale
<br />regulatory agencies are 110\\' doing a 11~II~r ji)h df Ill)licill~ 1Ilililic~ a:-.
<br />el~ctric rales hav~ incrt~;hl=d slcepl> III thl.' p;t:-,l 1L"1l yl.'i.lr.... hlll ill ~cll('ral
<br />Ihr.y operate with inadcqualc hudgL'(~, and an:- Ihl lIlafLh (i)r Ih\..' r'llH\l'l"
<br />\-:llmpanics with gr(,;ll ~lIl1h (If I111HI.:\ tit "1;t~I'. 1"111:1 I.' j" ...ill1pl~' no ade.
<br />Quale slIhslilllle for Ih.: aggr~.'l~i\'l;;' d) Ilallll.'llll df a ~:i)lIlp('lili\'I~ ..Y:-klll.
<br />Reccnt developmcllh in Cleveland, Ohio. and irl Indiana ami ~liehi-
<br />gan lInder.~('(Jr(' lht: n('l~c1 lu prOiL'l.! i1gillll~,1 I Ill.' "hll..L: of J11l~lIopol!
<br />power by inveslor o\\"lIcd Illililies, (.k'\'dallJ'.- nllllli,-ipal e1Cdfl'. ulilily.
<br />r\:fullY Liglul has hel~11 1I1lahll...' It) pUkha...c \\'IHlksalc pl\\\el" frnlll all~'
<br />soun.\' oth~r than ils ,:ompl'liICH, Ck\'danJ Lk'(lriL' 1Ill1ll1ili.llillg ('tllll-
<br />pany." Aee(!Hling to all alllilrlhl ,IImpl;ollll riled I" I\llIu)" I.ight. CI.:I
<br />has laJ\en ad\"anfagl.: of ih f1lOl1opnly IH):-'i1i11i"l ill ItlL' v:1l\1!c...<tk' j10\\"l'i
<br />markel hy charging r\tIlJl~ 1..lghl up III fUlIr i1Ull..... IllL' ;tlllnlllll chlllgl~d h~'
<br />eEl to its largest indll'llrial (t1SIf)fI1~r:'l in all L:'Itlll"l III (UfCl' fllI..' ~i{~ II)
<br />sell its ulility at di:--trcss ....ak pri('~s.
<br />On Janllary 30, 1979. a F,'dc..,,1 di"ri.:1 COLl.1 III Iudiana f.""Hllhat
<br />Ihe Indiana and Midugan Flecni,." COIllI'''UV. "nd it., I'"rcnt holdmg
<br />company, American rlectriL PO\I,\:I, had (:ll~a~I.:J ill ;t1l1i~{lll1pl2lili\l'
<br />acti\."ilies.!~ ;\cl..'ording Il) I Ill' ('tHlrI, llil.: (h.'rL'lld~ll1l... had L'",lllhli..hcd
<br />ratl'~ for sales of wholesale PO\\'t'(" 10 till' plilillfin..., II,.'n 11111l1icil'al del.'-
<br />Hie ....ysfcms, whi<.:h, when I:llmparcd wilh their 1"L'lail rall.':-; for COIl1.o
<br />parahle ser\'il:c crealed an i.lllli~nIllIWlili\'l.~ pric~ ~qlll~e/c. In addilion,
<br />the dcfendanls had notified Ihe plailllifh "t their 1'1.11" III cllrt"ilth"ir
<br />power supply in a manner whil..'h di~t.:rilllillcllcd a!l;till~1 IhL' \\'hlllt.:~all'
<br />pun.:hasers ill favor of Ihe L.'dlllpany's f(.'I.:lil t.'l/'illlllll.',.....
<br />III bOlh of these siluallolb, I hI...' ~Ill"i"id iJ( 1 Ill' 1l11l[\h.ip;t!lIlliillL'.... 11;1:'1
<br />been lhreaten('d as;) lesult (If aClilHh 1)1' Ilk ,..llllk..:ak PO\\!..'I ',upplii:l".
<br />Guaranteed acc(;'ss 10 Federal pow.:r ill ':Hl'a~ \\ hl.?l I: -,UI.'11 Pll\\ l'r I.'xi."'" in-
<br />sures fhat wholesale powcr supply call1HlI hl',",llllllo' ill,l(lI1l1 hi' u:'I.'d ill an
<br />anri-compclitivc manner 10 dimill:th.: Ulllllk'lillt! Illilil~ ...~..I!..'llh. Thw..,
<br />compelition is fostered and Ihe hcallh) di\"t~r...IlY I_If ~l\\ Ill'r~hip llf I.'kl'-
<br />nic systems is presl~r\'ed. Thcse e.\ampk:. and I Ill' ollh.'1" ~.tllbHkral inn:-
<br />mentioned above argue rersllasi\'cl~' hn Ihl.' I..'lllJlilllh~d l'.\i...lcIlL'~ ilnd
<br />de\'~lopment of public po\\cr ag(,lh.:iL'~ illld Ilill1-pro(il ;1~:-tl"':lalitllh.
<br />Accepling (he prellli~e Ihal Ihi~ :-,cgIII l'llI llf I Ill' iudlhll y i:'. all t.''':-,t.'llIial
<br />one and musl be preserved, il is L'videlll Ihal if Ih,' prercrcll,c c1.III.SC is
<br />abolished or draslically modified, I he viability of some publk alld n(1n-
<br />profil systems would he seriously jcopardized.
<br />
<br />.
<br />
<br />. ('k\l'Ialhl ha... ,lll~'lIIrlt'd [I) pIII...-ha...<:
<br />111l\\l"1 Ilnlll (l,h~'l 'IlllI ,'l,'... Olh: p~IIII\.'lllally
<br />..I 1 Lll': ll\l' "'lllll~'l' I.. Ihl.? 1\1\\CI -\Lllhllfll\ ..I
<br />Ill.' "'I ,Ill' "I ~..:\\ rill" lil\,kl Ill,' ~\a;'.ll;1
<br />Hl'd,'\ ,IIIPllh'llI .\,1116 l' ~; C "l~ ~.llll
<br />":11... k.llll 1'15', :,Owl, \11' I Ill.' Pd\\~'1 ~_TIl,'r:t!l il
<br />11,)111 1111" I '111il'd ~1;IlC'" ,11:IIC ,11 JIll' \\ill"l
<br />,'lllic NI;I.:l;ll'.Il{i\'.'1 11111-1 l11; 111'1.1, :l\jlllahk'
<br />I'~ I':\~N' ,111,1 pl,'lt'll'lhL h;I"I, III Pllldl.
<br />blll1Il~" ;111.1 ...lo1l'l.'I,I(\1,l'-. ~liill~ Il~:llIll.l" IIPl
<br />ill''':11 "hI...: 1\-' 1,.....I..j\.l' jlll~' P:\:'};-"Y [1\1\\1.'1
<br />,liI<' 1\11111.: 1."111",;d ,11 (111<1 \\h,,'1 IIl,1I
<br />/,11\\ \.0 [ lllhkl 1,':1'111\;1111" [,'rlll' ;111,]
<br />~.,ljldicrll!l',
<br />
<br />'CIf\" (~/ .'/I"-,/lllll'l1k:l, ll1dldllll. 1'1 al.
<br />I. 0!1f/L'f((',/l1 l:tt'clr{t' PUlll r ((IIII/lilll_I,
<br />1111.. t'/<I/.
<br />
<br />21
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