Duke Energy
EXCERPT:
Woman Freezes to Death After Power Cut
Employee Advocate – www.DukeEmployees.com – December 21, 2004
Elizabeth Verdin, 89, froze to death after Duke Power cut off her electricity, according to the Associated Press. The Greenville woman was found dead on the floor of her heat-less home on December 13. Her power was disconnected on December 6.

Greenville County Deputy Coroner Karie Cain said that an autopsy verified that the lady died from hypothermia. Sen. David Thomas sent a letter to Duke Power seeking answers.

It is illegal in some northern states to turn off power in the winter. In the South, laws tend to favor corporations.

Getting one’s power turned off in the winter is the first step in what can literally become a death spiral. If a person is already having trouble paying the power bill, how can they possibly come up with reconnect fees and extra deposits?

A lot of PR lip service is given to the “share the warmth” program. But in an aggressive effort to collect cold cash, there was no warmth to be shared with Ms. Verdin.

Sick Child and the utilities
EXCERPT:
Scrooges everywhere will wholeheartedly agree that harsh treatment for those in arrears is a sound business practice. In the dead of winter, ElectriCities knowingly cut the power to the home of a terminally ill, 7-year-old child, who was clinging to life with the aid of machines. Where does sound business practices stop, and attempted murder begin?

How many thousands of dollars was the electric bill behind to warrant such drastic action? The family was behind only a lousy $250!

The family was able to get their power restored in a few hours, by scraping up a partial payment. There was no mention of what extra fees ElectriCities will charge them for the disconnection and restoration of electrical service. Some power companies fortify their bottom line by turning off electricity as soon as possible to customers with overdue bills. Then the customers are hit with fat fees for reconnection and extra deposits are demanded. For even more extra profit, some electric deregulated states allow the power companies to raise the rates for customers that have been disconnected. When these companies get their customers down, they kick them for extra profit.


Utility decoupling giving utilities incentives to promote energy efficiency
EXCERPT:
However, if actual sales fall below the forecast, the utility will earn less profit and may not be able to recover all of its fixed costs. Under conventional regulation, therefore, promoting any kind of energy efficiency measure is clearly against a utility's interest. Any type of measure to encourage green building or more energy efficiency appliances therefore often faces opposition from utilities because it would undermine their profit.

Decoupling breaks the link between the utility's ability to recover its agreed-upon fixed costs, including the profit margin, from the actual volume of sales that occur through a rate adjustment mechanism. If a utility promotes less energy use, they are rewarded rather than punished.

Under decoupling, there are a number of ways to compute the rate adjustment, but the basic principle is that if the actual sales are less than what was forecasted, there is a slight upward adjustment in rates to compensate the utility. Adjustments typically would only be between 2-3 percent and some jurisdictions have applied caps on possible adjustments to protect consumers.

Any rate increase per kilowatt hour is usually offset by lower energy use and usually lower overall energy bills due to increased conservation and lower energy consumption. Typical rate changes due to current decoupling is almost imperceptible to consumers. And instead of utilities passing on the costs of building new plants to meet increased energy demand, under decoupling, consumers avoid the costs of new power plant construction and benefit instead from decreased energy consumption.

The California Experience

In 1982, California adopted an Electric Revenue Adjustment Mechanism and became the first state to decouple utility revenue from sales and removed disincentives for energy efficiency and conservation. The program was successful and reduced rate volatility. In 1996, however, the California Public Utilities Commission (CPUC) concluded that deregulating the utilities would be a better alternative to decoupling and the legislature subsequently adopted most of the recommendations and the utilities became deregulated. Under the bill, AB 1890, the utilities' rates were no longer regulated by the CPUC and instead the utilities would compete on the open market with other energy sellers. The results were categorically disastrous.

In their haste to cash out, two of the state's biggest utilities sold off too much of their generating capacity, leaving them with too little of their own existing energy supply. As a result, after a hot summer and a cold winter, the utilities were left at the mercy of independent producers who had acquired the generating capacity and could manipulate the wholesale market. Demand quickly ate up the cheap wholesale supply of energy and companies like Duke Energy, Reliant of Texas, and Enron made a killing selling power at high rates to the companies that had just sold them their generators. And, as we highlighted last week, California is just one of many states to have disastrous experiences with deregulation. Deregulation has not delivered energy savings and has often undermined state programs, as in California, that were promoting energy conservation.

After the mass electricity shortages in 2000 and 2001, California re-adopted decoupling in a groundbreaking energy-efficiency campaign that includes two billion dollars of approved investments in efficiency from 2006 to 2008. Every dollar invested by the utilities in efficiency measures have generated more than two dollars in savings for customers.

Duke Energy should not be overlooked in the shadow of ENRON
EXCERPT:
Amid the debacles at Enron, Tyco, and the rest, Duke's fall from grace has largely been overlooked. It shouldn't be. For years Duke was the envy of the industry, winning awards for innovation and customer service. It was the ultimate widows-and-orphans stock--safe, consistent, reliable. The utility's tumble shows how the lure of easy money can upend even the most conservative and well-regarded company. And it underscores the dangers of basing corporate strategies on the assumption that current trends will last forever.

Early Monopolies: Conquest And Corruption by Andrew Beattie
EXCERPT:
Monopoly, or the exclusive control of a commodity, market or means of production, is an integral part of history. In a monopoly, all the power is concentrated in the hands of a select few. Monopolies, in many cases, have been vital to getting large jobs done. Unfortunately, they also have been known for abusing the same power that makes them so effective. In this article, we'll take a walk through history to uncover the roots of this single-minded vision. (For more on this topic, see Antitrust Defined.)

When All Business was Small Business
Through most of human history, the formation of business monopolies, or even powerful monarchies, was precluded by the limitations of transportation and communication. Anyone can claim to rule a kingdom, but it comes to naught if you can't order your subjects around or send your soldiers to discipline them. In this same way, businesses were limited in most cases to the village or even the neighborhood in which they were physically located. Shipping by horse, boat or on foot were possible, but this added costs that made the shipped goods more expensive than locally produced products.

In this sense, many of these small businesses enjoyed monopolies within their own towns, but the extent to which they could fix prices was restricted by the fact that the goods could be bought from the next town over if prices went too high. Also, these small businesses were mostly family or guild operations that put the emphasis on quality rather than quantity, so there was no pressure to mass-produce and expand the market to other towns. The tools for mass production didn't become available until the industrial revolution, when cottage businesses were all but erased by factories and sweatshops. (For more insight, read An Exploration Of The Development Of The Market and Financial Capitalism Opens Doors To Personal Fortune.)

Monopolies: Corporate Triumph And Treachery
EXCERPT:
Monopolies came to the United States with the colonial administration. The large-scale public works needed to make the New World hospitable to Old World immigrants required large companies to carry them out. These companies were granted exclusive contracts for these works by the colonial administrators. Even after the American Revolution, many of these colonial holdovers still functioned due to the contracts and land they held.

Monopoly is the extreme case in capitalism. It is characterized by a lack of competition, which can mean higher prices and inferior products. However, the great economic power that monopolies hold has also had positive consequences for the U.S. Read on to take a look at some of the most notorious monopolies, their effects on the economy and the government's response to their rise to power.

Sherman's Hammer
Responding to a large public outcry to check the price fixing abuses of these monopolies, the Sherman Antitrust Act was passed in 1890. This act banned trusts and monopolistic combinations that lessened or otherwise hampered interstate and international trade. The act acted like a hammer for the government, giving it the power to shatter big companies into smaller pieces to suit its own needs.

Despite this act's passage in 1890, the next 50 years saw the formation of many domestic monopolies. During this same period, the antitrust legislation was used to attack several monopolies with varying levels of success. The general trend with the use of the act seemed to have been to make a distinction between good monopolies and bad monopolies as seen by the government.

Case Study 1: International Harvester and American Tobacco
For example, International Harvester produced cheap agricultural equipment for a largely agrarian nation, and was thus considered untouchable lest the voters rebel. American Tobacco, on the other hand, was suspected of charging more than a fair price for cigarettes - then touted as the cure for everything from asthma to menstrual cramps - and consequently called down the legislator's wrath in 1907 and was broken up in 1911.

The Benefits of a Monopoly...............

Monopolies
EXCERPT:

The history of railroad expansion in the United States during
the latter half of the 19th century is full of examples of
actions by railroad companies seeking to eliminate competitors

MONOPOLY NONPRICE ACTION
Since a monopolist is the only firm in the industry, it appears
that there is no need for nonprice action, such as advertising.
However, advertising and other nonprice action are used
as a form of public relations and for the purpose of avoiding
customer antagonism.

Electric companies are natural monopolies and do not need to
advertise because customers have no choice but to receive their
electricity from them. But, they do advertise. The purpose is
often to convince consumers that the company is on their side by
giving them tips on energy conservation, for instance.