Consumer Federation of America Says Restructuring Has Failed
9/20/01


A report recently issued by the Consumer Federation of America indicates restructuring of the U.S. electricity markets has failed. The report indicates that the failure of policymakers to set up proper conditions for a competitive market is to blame.

"There are very, very fundamental problems with this market," states Mark Cooper, CFA's director of research. "There ought to be a moratorium on restructuring." Cooper goes on to say that states that haven't begun restructuring their electric utility markets shouldn't do it, and states that have begun should concentrate more on competitive bidding for long-term supply and avoid the spot market.

In Kentucky, the legislature has been studying restructuring since 1998, and has concluded to adopt a go-slow approach to changes in the industry. The state’s Electric Restructuring Task Force has recommended holding off on any industry changes until definitive reports come in from other states—a position resulting in part from the fact that Kentucky has some of the lowest electric rates in the nation. Kentucky Gov. Paul Patton this summer established an Energy Policy Advisory Board to develop a statewide energy policy, and earlier this year, U. S. Department of Energy figures reported that Kentucky has the lowest rates in the nation.

The CFA report contains detailed information about restructuring failures, as well as recommendations for restructuring success. To download the report click here to CFA's Electricity section of its web site, and then click on Report under the "Nation's Recent Experience with Electricity Restructuring Reveals Its Near-Fatal Flaws" press release. 

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