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JUST A HUGE PUBLIC BAILOUT SAYS COLUMNIST

Molly Ivins, one of America's most outspoken columnists, based in Austin, Texas, for the Fort Worth Star-Telegram, blasts current plans to deregulate utilities which she says will saddle consumers with billions of dollars to cover utilities' "stranded assets," which are often huge investment in costly nuclear power plant.

Utility restructuring has become such a hot topic, one of America's most outspoken columnists is likening it to the 1980s savings-and-loan scandal that cost consumers $500 billion. Molly Ivins, a popular, funny and vitriolic columnist, based in Austin, Texas, for the Fort Worth Star-Telegram, blasts current plans to deregulate utilities which she says will saddle consumers with billions of dollars to cover utilities' "stranded assets."

Ivins, in one of her nationally-distributed columns in March, says that even though deregulation of utilities is not bad in itself, as planned so far it is a rip-off. She quotes estimates of the cost to consumers as $130-550 billion. That is because the bill introduced in the US Senate in late January by Senate Bennett Johnson would allow utilities to recover 100% of the costs of their "stranded assets" mistakes -- often huge investment in costly nuclear power plant.

She writes: "Here's how it would work: In this lovely new competitive environment in which all the generators have to compete with all the other generators, no one in his right mind will buy electricity from the South Texas Nuclear Project because it costs a whole lot more, right? But the utility stupid enough to have built that dog in the first place (hello, Houston Lighting & Power) will be allowed to recover the entire cost of its investment in it. And more. The company will get to project costs out over the entire projected life of the plant and get paid for that too. Presto! The largest public bailout of a private industry in history.

"Some utilities have made bad decisions, and some have made good ones. Now those who made lousy decisions will be let off the hook, their shareholders will not have to take a hit, and consumers will pay for the bad decisions." Ivins concludes: "This is a nice, fat, complex issue, so we can come back again to look at some of the truly awful environmental effects that utilities deregulation could have, in addition to some of its social impacts. But for now, just keep in mind the downside to retail competition in electricity -- and whenever anyone says "stranded assets," run screaming from the room and call the cops," she concludes.

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