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The model on which U.S. electric industry deregulation was based is, after 10 years, a failure, says Theo MacGregor of MacGregor Energy Consultancy. Since that time, although world oil and natural-gas prices plummeted (yes, they are relatively high now) and electricity employment was reduced by 50 percent, generating prices in the United Kingdom remained far above the cost of production. Power companies literally did not know what to do with all their profits. In one year National Power, one of the two private power-generating companies, paid dividends to its stockholders that exceeded the entire value of the company's stock at privatization.
An investigation in 1997 found strong evidence that prices were being manipulated so that wholesale prices were--and would remain--high. Indeed, after nearly a decade of "market pricing," electricity prices in Britain for residential customers in 2000 were 44 percent higher than in the United States.
The June issue of IEEE Spectrum, in addition to MacGregor's essay, also features two other views on the problems inherent in the deregulation of electric energy. Karl Stahlkopf of the Electric Power Research Institute writes that "Technology Offers Solutions to the Current Power Crisis," and Glenn English of the National Rural Electric Cooperative Association explains the importance of "Putting Consumers First."
Contact: Alfred Rosenblatt, 212 419 7550, [email protected].
For faxed copies of the complete essays ("Technology Offers Solutions to the Current Power Crisis" by Karl Stahlkopf, "Electricity Restructuring in Britain: Not a Model to Follow" by Theo MacGregor, and "Putting Consumers First" by Glenn English, IEEE Spectrum, June 2001, pp. 14-16 and 19-20) or to arrange an interview, contact: Nancy T. Hantman, 212 419 7561, [email protected].
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