Guest Opinion: Support the Public Power Initiative
Nicholas Johnson
The Daily Iowan
December 12, 2001, p. 8A
The Iowa City Public Power Initiative wants us to think about a municipally-owned electric power company. Hard to argue with the value of thinking.

But we’d first need to discard words like "capitalist" and "socialist" that prevent thinking. America is neither. It's a nation of pragmatists. That's our ideology.

We like our Public Library and public schools. A free Interstate 80 rather than a for-profit road. Reasonably-priced municipal recycling.

But nobody’s marching for municipally owned grocery stores.

When we can improve public services by using business techniques, as our School Board does, we do it. When we want government to insure the quality of the food in those privately-owned supermarkets we do that.

We support what works.

Clearly public power has worked -- sometimes. Benefits to both public and private power came from the benchmarks provided by the Tennessee Valley Authority's generating electricity. I'm old enough to remember the impact of the Rural Electric Administration on my Uncle Chet's farm in northwest Iowa.

Would municipally-owned power work for Iowa City? We don't know. That's why the Initiative advocates a study.

Private power companies’ employees always seem friendly and competent.

But when those companies start merging, acquiring other businesses, and expanding their monopoly territories -- and tell you they're doing it to provide better customer service -- you'd better grab your wallet.

When they preach the benefits of deregulation and the marketplace, remind them of the disaster those ideologies created for the entire state of California.

Most electricity comes from coal, oil or natural gas. Its production depletes limited resources that sometimes require military operations in the Middle East. Burning them causes environmental pollution.

We don't need to "freeze in the dark" to conserve power and the environment. Turning off the lights when leaving a room needn't cramp one's "lifestyle." Nor does closing the windows -- when running the air conditioner in the summer, or sleeping under electric blankets in the winter.

Like other businesses, private power companies are in the business of increasing, rather than decreasing, their sales. Sure, they publicize power-saving suggestions and insulation programs.

But meanwhile, without publicity, they’re lobbying regulators for rate structures that put the lie to such posturing.

The more electricity you use the less you pay. That's right. If you're sufficiently wasteful to use over 800 kilowatt-hours (kWh) a month you only pay about 4 cents per kWh. If you're conscientious, and try to conserve, the company will charge you nearly twice that.

If you'll agree to become truly wasteful, and heat your house with electricity -- probably the least efficient method -- the company will sell it to you for about 2 cents per kWh.

And the impact on the poor is even worse. They not only pay more per kWh, the company sticks them with an additional "basic service charge” of $6.

Assume you can't afford to use more than 400 kWh a month. At "all-electric" home rates your bill would be $8. If you used over 800 kWh, the extra 400 kWh is $16. But because you're poor, your bill is nearly $32 (at roughly 8 cents per kWh) -- before the "basic service" charge.

For the poor, that extra $6.00 is a 20 percent override (to $38.00)!

It's like the banks firing the tellers, installing ATM machines, then charging you for doing what they used to have to pay tellers to do. The auto repair shops that add extra charges for the rags used. The $250-a-night hotel that "has to" charge a dollar for each local call -- when a nearby Motel 6, at $35, can provide them free.

Imagine if the supermarket added fees for "transportation" and "stocking." You know, the "basic service charge" for providing you groceries.

Municipal power raises a lot more issues than basic service charges. But only good can come from the Initiative’s efforts to get us thinking about them.

Nicholas Johnson
visiting professor, UI College of Law