If you've been following the politics behind the Ameren rate increases in Southern Illinois, you know that the ability to provide electricity should truly never be left in the hands of politicians.
Electricity was "deregulated" 9 years ago in Illinois, with the promise of a rate freeze, the decoupling of power generators and power distributors, and the convenient idea that keeping rates lows would keep voters happy until another set of politicians had to deal with the problem.
Well, the rate freeze is over, or at least it's scheduled to be over, and Illinois politicians are up in arms because their constituents found out that cheap electricity was not a basic fundamental right, but the result of a company providing a service to make a profit.
I was in California when their power woes made daily headlines, and though the Golden State made a lot of hay about Enron (one wonders what would have happened if Enron hadn't been a convenient scapegoat, the fact was that politicians negotiating prices for power is always a bad idea.
So now the problem has come to Illinois. Ameren says it's losing too much money to give out electricity at old prices - and they are well within their rights to charge more - but a series of PR mistakes including discounts on all-electric homes and the Taum Sauk dam failing has them scrambling.
I followed this pretty closely after the latest round of storms (we lost power), and thought they were getting a bad rap, primarily because they make a convenient target for demagogues who realize promising voters free stuff makes you a hero.
What is the way out? No ones knows. If Ameren doesn't raise prices, they'll declare bankruptcy in Illinois and leave the state to its own power generation. They don't want that as the fate of almost a 1000 employees hangs in the balance, and the political fallout of picking up your marbles and going home would cause problems for years in both Missouri and Illinois.
They can't keep losing money - at some point the loss would be higher than simply calling it quits. So now the Illinois legislature fiddles while disconnection notices start showing up in the mail. If this were simply a matter of negotiation between customers, companies and the government, there might be a solution. To negotiate, everyone has to act in good faith. That's not happening here.
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