Monday, February 5, 2007

A look inside the sausage factory

Some exerpts follow, but read this whole article on electricity deregulation in Virginia. It's a lesson in public choice.

If the legislature doesn't act, Dominion will be free of regulation in 2010, the result of previous action intended to give consumers a choice in their electric companies. But competition that was once predicted has not materialized, giving rise to fears that rates for electricity could soar even higher without the changes. That's what happened last year in Maryland, where utility rates in some areas rose as much as 75 percent.


After nearly a decade of marching toward deregulation, Virginia is now racing the other way.

And here's (some of the) special interests:

Now, the tough decision shifts to lawmakers, many of whom have received tens of thousands of dollars in gifts and campaign contributions from Dominion over the years.

The company gave almost $560,000 to candidates in 2006 and has given about $3.8 million since 1996, according to the Virginia Public Access Project, which tracks campaign fundraising. In addition, several lawmakers own more than $250,000 worth of Dominion stock, which hit a new high Friday after the House committee approved the legislation.

The company also takes advantage of state laws allowing lobbyists to offer gifts to lawmakers during the legislative session. In 2006, the company spent $7,245 on sporting events for lawmakers, according to the Virginia Public Access Project. It spent $5,545 on meals, $4,808 on airfare, $3,646 on hunting and fishing, and $750 on theater shows.


But critics say the campaign donations help grease the way for new regulations that could guarantee profits for the company worth billions of dollars over the next several decades.

And here's the hopeless and economically illiterate voter:

"How much authority will the State Corporation Commission have to act to make sure that rates are fair?" Carlin asked. "That's the bottom line."

I feel like Jack Nicholson in the psychiatrist office asking, "What if this is as good as it gets?"

Update: Looks like they voted to protect the monopolist, and screw the voter. Hmm, I wonder why "competition that was once predicted has not materialized"?

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