Tuesday, November 14, 2006

Free markets do work

Via LexisNexis, we get this article originally published in the Pittsburgh Post-Gazzette: ENERGY REPORTER: EDUCATE THYSELF;
ELECTRIC DEREGULATION HAS BEEN A BARGAIN FOR CONSUMERS, BUT YOU WOULDN'T KNOW IT FROM THE MEDIA
Imagine an area where prices are substantially lower today than they were in 1991. You don't have to imagine.
In the Duquesne Light territory, the average residential customer who was paying $93.48 per month for electricity in 1991 is now paying $54.30, a stunning 42 percent decrease. This bargain exists even though rate caps ended at Duquesne Light in 2004. Even after a transmission and distribution rate increase takes effect in 2007, Duquesne customers will be paying 32 percent less than in 1991.
Deregulation spurs savings? What will the Left say?

Laws changed - mandating competition. The result...
The electric industry responded to the new incentives by becoming much more efficient, reflecting the shift of risks and rewards of owning generation from ratepayers to plant owners.

The forces of this new competitive era aren't found in just electric bills. Pennsylvania's first major wind farm was built in 1999 by a new entrant to the marketplace, and today Pennsylvania has six operating wind farms, two more under construction, and more than 2,500 megawatts in the new generation queue at the PJM Interconnection, which coordinates electricity transmission across a multistate area. Pennsylvania is on the way to building enough wind power to supply more than 1 million homes -- 20 percent of the residential accounts in the state.
Well, free markets generate savings, encourage experimentation and reward people who accept risk - and serve all of us by reducing total costs.

And there are few shots at the "professional journalists."
Most reporters do not even express prices in constant dollars. That's not fatal to real understanding if one is comparing prices over a short period of time. But the failure to use constant dollars when looking at price trends over five years or 10 years or 15 years leads to horribly misleading conclusions.
But then the "professional journalists" are often better described as propaganda hacks - they want the conclusions to be one-sided. Fairness? That is so out-dated; it went out with "fake but accurate."

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