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Co-ops Measure Up

I told you so.

Now I�m going to tell you why.

Yes, that sounds arrogant, but for the electric cooperatives of Kentucky, it�s well-deserved.

The cause of this crowing is a series of news reports about the 23 states that deregulated their electric utility industry several years ago. The results of the experiment in economics are coming in, and they show that under deregulation, consumers lose.

Delaware officials are scrambling to avoid a 59 percent rate increase this month. Other states face similar problems as rate ceilings expire. Those temporary rate caps were part of the original deregulation laws. They were supposed to ease the transition to a time when the free market lowered rates for everyone.

Kentucky looked at the deregulation mania sweeping the nation and, at the strong urging of the electric cooperatives, decided to wait and see how it worked out in those other states.

Today, Kentucky�s electric rates are the lowest in the nation.

That�s the what.

Here�s the why: electric co-ops led the way in making the right decision about deregulation because they care more about consumers than other utilities do.

The electric utility industry is dominated by investor-owned utilities. As their name implies, it�s their financial duty to run their businesses in a way that benefits share-holders. Not customers.

Investor-owned utilities led the charge for deregulation in the 1990s. They�re doing very well now, while their customers suffer.

Electric co-ops are owned by their customers and operate as not-for-profit businesses. Their financial obligation is to provide the best combination of low price and high-quality service to their owners�that�s you.

People who study co-ops talk about �the yardstick principle.� The idea is that because co-ops are private, not-for-profit businesses owned by their customers, they set the standard for their industry. In other words, co-ops provide a �yardstick� for measuring what good service and good prices should be.

Our state has surely had its share of energy price increases this past year, as energy prices rise all over the world. But states that chased the wishful thinking of deregulation, when common sense argued otherwise, face some of the highest increases of all. Kentucky�s relatively low rates are thanks in part to the state�s electric co-ops.

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