Portland, OR
State and federal efforts are taking place to restructure the electric power industry with the intent of increasing efficiency and lowering costs. Political pressure, particularly from large industrial users and power marketers, combined with an unwarranted belief in the ability of market forces to solve all problems in this complex industry may result in changes that undermine the system rather than make it better.
The North American electric power system is the best in the world, with industrial rates lower than those of the largest industrial countries. It also has the highest level of service reliability and an excellent safety record. A lack of caution by deregulation advocates could worsen rather than improve the performance of the electric power industry.
The AFL-CIO is concerned about a number of vital issues that have emerged from proposals to restructure the industry. Utility cost-cutting and downsizing can undermine the reliability of the nation's electricity supply system. The cost to average consumers may rise while the benefits of deregulation accrue to large industrial customers who have the most market power. Community-based programs now funded by local power companies may be lost, including lifeline energy assistance, wildlife and environmental preservation, and local economic development programs.
Universal access, which assures all customers access to affordable power, will not automatically be provided in a competitive market. Local governments face the loss of a large share of their tax revenues if local power facilities are deemed non-competitive and are prematurely retired. If deregulation is not approached carefully, many utilities could face bankruptcy due to the inability to pay off debt on existing power plants and other facilities, with a resulting negative impact on workers, communities, and consumers.
There is also a likelihood that electric power generation may be dominated by a few large firms following a shake-out under competition. Environmental and conservation programs, voluntarily implemented by utilities, will not be continued unless there are legal requirements placed on all competing firms. Employment, worker safety and public safety can be jeopardized if deregulation results in excessive cost cutting and downsizing by electric utilities which are stressed by the new market structure.
The AFL-CIO is committed to ensuring that deregulation and power industry restructuring bring about positive results rather than destabilizing the industry. Specifically, we seek to avoid threats to job stability and quality of employment in this vital industry, to advance mechanisms for assuring fair costs to all consumers, and to assure sound environmental policies in all aspects of electric power supply while guaranteeing that electric power industry restructuring does not undermine our world-class electric power industry.
To accomplish these goals, the AFL-CIO will reach out and coordinate a full dialogue with consumer, environmental, and other national organizations that share labor's concern on these issues. This coordinated activity will seek to raise public awareness and convince government policy-makers to take steps that will guarantee positive outcomes for all consumers, workers and the environment. The AFL-CIO recommends that, as part of its outreach effort, the coalition seriously consider holding a "summit" conference on utility deregulation.