Deregulation Could Shock Homeowners Power Bills Up For Small Business, Too, Study Suggests

Small businesses and homeowners in Idaho may suffer higher power bills under proposed deregulation of the electric industry, according to a recent study in Louisiana.

Small businesses’ rates may rise twice as much as they would without deregulation over seven years, said the study conducted for a New Orleans utility by Texas Perspectives Inc. of Austin.

Though it focused on Louisiana, the study also generally would hold true for other states with low electric costs, such as Idaho, said Jon Hockenyos, managing director of Texas Perspectives and co-author of the report.

“The largest power customers would see a decrease in rates right away if they were permitted to shop around for their electricity,” Hockenyos told the Wall Street Journal this month.

“The smaller users - namely residents and small businesses - would have to pick up the tab in the short run with sharply higher rates.”

Meanwhile, deregulation already is costing taxpayers money, so far more than $1.5 billion, in bailing out rural power suppliers that might not survive deregulation with their heavy debt load.

A provision of the new Farm Bill eases the process of debt write-offs, by allowing the Agriculture secretary to forgive loans without the attorney general’s approval.

So far, the Clinton administration has forgiven $982 million of debt for Soyland Power Cooperative, an Illinois utility; and $530 million for Desert Generation and Transmission Cooperative in Utah, according to the Wall Street Journal.

In the Northwest, power officials have recommended opening the entire electric industry to competition heading into the next century.

And some utilities and large electric users are able to shop around to get power at lower costs. The change has already benefited Raft River Cooperative in Malta. It can buy power from lower cost suppliers, saving the co-op money, reported manager Bud Tracy.