Sunday, October 02, 2005

Crain's explains power play between ComEd and Illinois

Steve Daniels does the best job I've seen in laying out the conflict between shareholders of ComEd and Illinoisians. The dozen or so nuclear power plants in Illinois produce the cheapest electricity in the country - 1.2 cents per kilowatt. Dirty coal is 1.6 cents. But natural gas, which was supposed to be cheaper, ten times as expensive at 13.3 cents. So the national market price for power is around 5 cents. Who should get the benefit of this cheap nuclear power? ComEd shareholders? (ignoring the subsidiary question, since the nukes are owned by a sister company to ComEd) Or Illinoisians? Illinois is clearly better off if we get the benefit, and that is basically what the public policy dispute is about. The full article is worth a read in the 9.26.05 issue.

4 comments:

Lazerlou said...

Yea privatized energy really sucks. Allowing the rich to profit off of providing basic services is pretty lame. But state by state protectionism certainly isn't the answer either.
Dan, would you prefer the state to own com ed?
Or would you that it taxed Com Ed to get the value back indirectly for the state and its citizens?
Would you force Com Ed to sell well below national market rates to only Illinoisans at cost or near cost?
Do you think Illinoisans only should benefit from the cheap electricity generated here?

I don't think we want to promote balkanization, encourage Federalists, or increase states rights, even in tempting forms like medical pot or localized energy efficiencies, when substantive federal regulation and oversight is the only real answer for the power needs of our nation.

Anonymous said...

DJ -- check out cap fax blog. The Gov is going to propose a program to offer health care to all kids in illinois.

Dan Johnson-Weinberger said...

Lou -- when will you accept that D.C. is not your friend? The Siren Song of a progressive federal government making policy for the nation is a myth. That hasn't happened since the New Deal -- and that was largely because the apartheid Southerners were still Democrats because they resented the Republican invasion we call the Civil War. Progressives should embrace state rights, because we run some of them. So as to energy, it is fair to say that Illinois should benefit from the cheap nuclear power, since Illinois ratepayers built the plants. We still pay higher prices than the rest of the nation, largely because these nuclear plants were very expensive to build and our rates went up as a result of those high prices. So since Illinois built then, Illinois should benefit from them. ComEd/Exelon should also benefit from driving costs down so much over the last 3 or 4 years, but I don't see why the national wholesale price should automatically be used to set Illinois prices as well. What's so special about the national market price? And anon-- thanks for the tip. I'll write about that now.

Lazerlou said...

Oh Dan, don't lose faith! The next New Deal is right around the corner. Concentrating on states is irresponsible as we have an ethical duty to the minority and poor citizens of Mississippi as much as we do to the poor of Illinois. I'm very pleased we can and do make progress on the state level in Illinois, New York and California, but without DC and the Federal government to provide a unifying regulatory force, we are doomed.

World citizenship Dan. Keep the dream alive. We are all in this together, not just in this state or country but in this world.