- The Washington Times - Wednesday, September 3, 2003

Shortly after the “Blackout of 2003,” Sen. Hillary Clinton, New York Democrat, used her appearance on CNN’s “Larry King Live” not to discuss solutions to our energy problems but to blame all our problems on deregulation.

This attack was misguided and shortsighted. There are risks associated with any major policy proposal, particularly one as complex as the energy plan. We have to take into account a number of different factors — reliability, cost, safety, and equity are just a few. We also have to consider the stakes — without a reliable power supply, our lives grind to a halt.

Any energy plan should address these risks and clearly outline how to ensure reliability while offering the lowest prices possible. It should also encourage conservation and the use of multiple energy sources.

However, any discussion should focus on the merits of each proposal. As far as deregulation goes, you do not have to look any farther than Pennsylvania to find a state that has successfully navigated these risks.

In the 1990s, the Commonwealth moved to deregulate our energy market in response to skyrocketing prices for electricity. The program’s success has been touted as an example of how the United States can handle the issues facing our nation’s energy system while reducing costs for consumers.

However, rather than embark on a wholesale deregulation program, the state wisely set up pilot projects to ensure that deregulation would actually work in lowering energy prices while maintaining reliability.

When given more choices, customers switched to alternative suppliers, lowering the price they paid for power. According to a 2001 report published in State Policy & Economic Development: 2001, “Pennsylvania has been successful in achieving rate-savings to customers.” Between 1996, when the restructuring began, and 2001 residential consumer rates fell more than 10 percent.

In addition to reducing rates for customers, Pennsylvania created a fund for clean energy. The Sustainable Development Fund (SDF) was created to provide financial assistance, energy efficiency, renewable energy, or advanced clean energy technologies. Over the entire state, there were $450 million in guaranteed rate reductions in 1999 and there was nearly $100 million devoted to prospective funding for low-income universal service and energy conservation programs per year.

Deregulation in Pennsylvania worked. For our state, it was hardly a scheme designed to pad the pockets of utility companies, as Mrs. Clinton suggests. It was necessary to ensure that consumers could afford the power we need to live and provide our economy with the energy it needs to grow.

That type of reform takes leadership and courage to enact. The easy answer is to throw taxpayer money and government regulations at the problem. But that strategy has failed us in the past in so many areas. Excessive regulation and government subsidies increase prices and taxes in the long run.

However, as the blackout demonstrated, we cannot afford to lurch from crisis to crisis. We need a comprehensive approach to our energy needs to ensure Americans a steady, affordable, and reliable supply of energy.

In May 2001, only four months after taking office, President Bush proposed a comprehensive National Energy Policy and has taken steps to implement it. The president’s national energy plan included 105 recommendations, many of which were very specific to the transmission grid. Ninety of those recommendations have been implemented or are currently pending before Congress.

The Republican plan mandates enforceable electricity reliability standards; expedites siting of transmission facilities to remove bottlenecks that could lead to more catastrophic blackouts; expands investment in transmission infrastructure; provides incentives for more-efficient and advanced transmission technologies; and ensures regional coordination of electricity transmission facilities.

In some cases, regulation is warranted. But regulation and central control are not the panacea for our energy woes.

The fact is the government cannot do this alone without significantly increasing the amount of money it takes from your paycheck. However, if Washington works with energy producers and distributors to enact effective reforms, like those we have used in Pennsylvania, real progress can be made.

Joseph R. Pitts, Pennsylvania Republican, is a member of the U.S. House of Representatives.

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