Deregulation will hurt students

No idea in American politics has a worse track record than deregulation. Airline deregulation has led to high ticket prices (especially for business travelers) and service so awful that some foreign tourists would rather swim the Atlantic than deal with an American airline.

Deregulation of electricity in California has plunged the Northwest into a power crisis as depressingly endless as Stephen Segal’s acting career.

So what has the Oregon legislature, that fountain of wisdom in Salem, decided to do about it? Last Wednesday, they voted 35-25 for deregulating electricity in Oregon – although they did put off deregulation by 18 months, apparently hoping that Oregon voters will forget the California disaster by then.

Unfortunately, there’s just no talking to the free-market nut cases who support electricity deregulation. No evidence will sway them, no disaster will convince them they’re mistaken. These aren’t rational, thinking human beings; they’re slavering beasts, driven only by insatiable lust for profits and mindless faith in the divine perfection of marketplaces.

For the rest of us, though, it’s pretty obvious that electricity deregulation can never and will never work. Unless by “work,” one means to say “totally screw over all the rate payers while delivering many truckloads of cash to big corporations like Enron.”

In order for Oregonians to have reliable power, whoever produces the electricity needs “excess capacity.” What that means is, they have to be able to produce more electricity than they can actually sell. That way, if demand for electric power suddenly goes up, the electric company will already have the extra juice online and ready to go.

With a regulated market, keeping a healthy excess capacity is no problem, which is one reason Oregonians have had cheap, reliable electricity for decades. But when the free market is in charge, it’s another story altogether.

Having excess capacity costs money, after all. Why should any private electric company want to lose money preparing to make more electricity than it can sell? Excess capacity makes no sense, from a free-market point of view.

Instead, a clever private electric company will make no more electricity than it knows it can sell. And if demand for juice unexpectedly jumps up? In that case, the companies can simply raise prices to match demand.

Admittedly, the deregulation the Oregon legislature voted on isn’t as extreme as California’s deregulation plan. But we have to remember that deregulation advocates are wide-eyed fanatics, blind to any value but irrational worship of free markets.

How will all this change the lives of students at PSU? We’re special. We’ll be screwed twice over.

Like other consumers, we’ll be paying more for power at home while getting less reliability and service. But we also pay for power a second way; PSU’s enormous electric bills are paid out of our tuition bills.

Think about it. PSU has thousands of classrooms which need electricity for light and heat, hundreds of computers which need electricity to produce their error messages. The elevators in the new Urban Center don’t run on gerbil power, and neither do all those nifty new A/V terminals installed in some classrooms.

When deregulation hits and electric prices go up – and up – and up, PSU’s administration will suddenly be paying three as four times as much just to keep the campus juice flowing. They’ll either have to have to cut back on education – meaning fewer professors, fewer and larger classes, less lab equipment and worse student services – or they’ll have to raise tuition. Or maybe both.

Whatever PSU is forced to do, we can be certain that PSU students will be worse off for it. But hey, at least Enron executives will be getting rich.