Generating Funds to Pay the Energy Bill

Re “Power Marketer Ordered by FERC to Refund $8 Million,” May 1: When huge corporations such as Williams Energy Marketing & Trading say they admit no wrongdoing but agree to pay an $8-million “refund” in order to avoid further litigation, what they are really saying is that they made so many more millions fleecing the public in the first place that the settlement sum is a drop in the bucket if it’ll help put the matter behind them so they can get back to the business of fleecing the public.

Jim Mallon

San Luis Obispo

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The state of California plans to issue an estimated $12 billion in securities to recover the cost of buying power and, in the process, shift the burden from taxpayers to ratepayers. To help electricity ratepayers, the energy marketers and electricity generators who benefit from the California market could agree to purchase these bonds at a greatly discounted, lower-than-market price. By so doing, the repayment burden on ratepayers would be much lower than expected. Under the current scenario, bond investors will demand a risk premium for the state’s borrowing plan. By this proposed approach, energy firms could deploy their “windfall” profits to subsidize the state’s borrowing rate. This “buy-down” of interest rates would offer financial and civic benefits for all parties.

W. Bartley Hildreth

Professor of Public Finance

Wichita State University

Wichita, Kan.

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It would require a sizable investment to replace our electric meters with clocked meters, as has been done in some nations, but that move would largely solve the power shortage problem. We do not need conservation 24 hours a day--we need it during hours of peak usage. In nations with clocked meters there are usually three rates: a high one for peak hours, a very low one for five or six hours after midnight and an intermediate one for other hours. By adjusting rates properly, demand could be smoothed out so that current generating capacity could handle the load.

Alexander M. Mood

Irvine