Electric "Merger Mania" Threatens Consumers in Coming Deregulation

The coming deregulation of the electric utility industry has small utilities scrambling to expand their market power in a flurry of mergers, forming massive power corporations unheard of since the corporations were restricted by the anti-trust Public Utilities Holding Company Act of 1935. Consumers, who face shopping for power in a brave new world of mega-power companies, are threatened with shrinking market power and meaningless "choice."

Even high volume industrial consumers are concerned that deregulation will not bring real competition."Mergers are starting to cause consumers a lot of trouble," said the Electricity Consumers Resource Council's (ELCON) executive director, John Anderson.The consumers he was talking about are big industrial companies, dependent on cheap electricity, and the mergers were of electric utility companies that supply them. He said that Federal regulators should not allow utilities to devour one another at a time when the industry is supposed to be growing more competitive. "Unfortunately, more competitive does not mean more competition," he added.

The implications are even worse for small businesses and residents, whose market power will be insignificant in the consolidated international markets.

Around the Country, a flurry of mergers have surfaced over the past two weeks:

Consolidated market power on the supply side indicates the need for consumers of all ratepayer classes to develop reliable market power on the demand side.