CBS hints at need for more power regulation

Ken Shepherd of the Business & Media Institute argues in a short article posted Friday that a recent story on the CBS Evening News argued for more utility regulation.

Shepherd wrote, “Reporter Trish Regan’s August 3 story displayed a chart showing an increase in the number of blackouts in the past few years. Regan then complained that after years of gradual price increases, many major electrical utilities are now increasing rates dramatically, including a 72-percent rate hike by the BGE, the utility that supplies power to metropolitan Baltimore.

“‘The industry defends its hikes, saying prices were artificially low for decades because of government regulation,’ Regan said, introducing a sound bite from Bill Brier of the Edison Electric Institute, who blamed rate caps for holding down prices below inflation in many cases.

As rates go up and the power companies bring in more revenue, ‘the utility companies say they plan to spend $17 billion a year over the next decade to make these improvements,’ Regan noted.

“‘But Trish, isn’t that what they always say,’ complained Schieffer, who suggested even more regulation was in order: ‘Is there any way they could be held to that?’ he wondered.

“Prompted by Schieffer’s question, Regan suggested the U.S. electrical industry needs ‘economic incentives’ such as the fines that New Zealand’s government slaps on power companies who suffer power outages.”

Read more here.