Thursday, December 16, 2004

Getting squeezed by rising prices

In yesterday’s Portland Press Herald, the front page headline was about our public utility, Central Maine Power Company, raising its rates 17 percent in March.

Certainly, the cost of producing electricity has gone up due to increases in the price of oil and other related fuels. However, a rate hike of this magnitude is substantial. It has the greatest impact on those on the margins of society and others on fixed-incomes, not to mention that it adds more strain to the already cost-burdened middle-class homeowner.

First of all, for the purposes of public disclosure, I want my readers to know that I did work for 10 years in the power industry, for CMP. Having disclosed that, I’m not real happy about a rate hike on top of all the other increased costs consumers are facing. During the past three months, the cost of fuel, food and a number of other consumer goods have increased. Meanwhile, wages remain stagnant, so working class people are falling further behind in the Bush administration’s “robust” economy.

Like other segments of the utility sector, electricity generation has gone through a period of deregulation. The current version of CMP isn’t anything like the utility I left in 1995. Much of the control of the company has shifted and while still regulated by the Maine Public Utilities Commission, most of the decisions are made by out of state executives.

Deregulation, along with privatization are two of the free-market schemes frequently trotted out by conservatives as panaceas to all of our price concerns. Constantly, conservatives tell us if we just let the market set prices, consumers will be the beneficiaries of greater efficiencies and lower prices. In reality, this hasn’t happened in any of the areas where deregulation has been allowed. From the breakup of Ma Bell and the telecommunications industry, to the deregulation of the airline industry, the free market has done nothing that would remotely benefit consumers. While the case could be made that deregulation has given us lower airline fares, in reality, it’s severely weakened the major players in the industry, forcing the government to step in and subsidize an essential part of the country’s transportation mix. In essence, John and Jane Q. Public are subsidizing those lower fares with our taxes, which never seem to get lower.

Regardless of whether or not deregulation and privatization have worked, the President is determined to do his damn well best to privatize Social Security next. Despite the fact that its demise and disappearance is a myth, the administration, with the backing of a right-wing majority in Congress, is aggressively pursuing this plan. Like all schemes, this one is another recipe for disaster and will cripple many hard-working Americans when they are ready to retire.

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