Date posted online: Monday, April 16, 2007
Now is perfect time for a study of utility takeover
Guest Commentary by Shaw Friedman
Your April 8 editorial showed just how out of touch the newspaper is with the economic reality created by NIPSCO's high rates and poor service and the impact on economic development efforts in our region.
While you wrote editorial after editorial pining for a study of the proposed Illiana Tollway, your opposition to the study envisioned in HB 1824 regarding the feasibility of a nonprofit public power authority in northern Indiana shows how selective you are in your desire to "study" an issue.
At a time when NiSource is looking to reduce its $6 billion debt by selling off its highly profitable NIPSCO electric operations, what better time to evaluate the feasibility of a public power authority for our region?In an editorial reminiscent of some of the right-wing attacks on the New Deal written in the 1930s ("Social Security is creeping communism"), your effort to equate public power with some kind of banana republic nationalization was just plain insulting.
Public power now serves some 40 million U.S. customers in both REMCs and municipal utilities. The most instructive example for us here in northern Indiana was the effort by the New York General Assembly to authorize the buyout of the failed LILCO private utility on Long Island in the 1990s and replace it with a nonprofit public utility.
The Long Island Power Authority (using $7 billion in revenue bonds) bought out LILCO and granted 20 percent reductions in rates, $200 million in customer refunds and helped create 50,000 new jobs on Long Island by having lower rates as an incentive to new and developing businesses.
That's why Rep. Scott Pelath's legislation to study the feasibility of a public power authority is so important and why it's garnered bipartisan backing in both the Indiana House and Senate. HB 1824 would provide for a valuation of NIPSCO electric assets, would research comparably sized utilities elsewhere in the country and would gauge financing options for a public utility.
Your defense of "existing businesses" (meaning NIPSCO) is touching except when you remember that a regulated monopoly like NIPSCO is not a free enterprise in the classic sense of competing in the marketplace. The company has a government-granted franchise, and its 445,000 electric customers are captive ratepayers with no choice or freedom to pick an alternative in the marketplace.
Let's at least explore the options that public power might provide. As the South Bend Tribune put it in its March 15 editorial endorsing HB 1824, the feasibility study "is a reasonable step that should move forward" to provide the state the "ability to study all its options. We don't see anything wrong with that."
Copyright © 2007 nwi.com