Why is a public utility, such as Ameren, which provides a product that none of us can live without, which we MUST have and must pay for . . . why is such a utility ever allowed to make a profit?? Never mind $123 million in the first quarter of the year. Why is it allowed to make a profit at ALL?
By “profit,” I obviously do not mean monies for upgrading their systems, which are badly needed, and providing salary increases for hard-working staff. But the stockholders and those who sit on their rumps and rake in money are welcome to kiss my ass.
Would we bless the sale of water at $50 a gallon to people who can't
get it any other way? Would that be okay? This is not okay.
We are not obliged to assist huge profitable companies to become
huger and more profitable. Let Lexus and Microsoft charge what they
want. I don't need either product line. But I do need electricity,
and to have my electric rates raised by a utility that is already
making money at an embarrassing rate is wrong on too many levels to
list.
We needn't even consider allowing a rate increase for Ameren. At
this level of profitability, we need a government-mandated
independent auditor to periodically determine exactly how much money
these greedy cretins really need to provide service, and set rates
accordingly. Only in that way can the government act on behalf of
our society.
Subscribe to:
Post Comments (Atom)
3 comments:
The only economic rationale I've heard for public utilities being for-profit companies is that they can 'raise capital'. Yet in nearly all cases, capital for investment is raised by borrowing. A utility owned by the public for the public could have the same access to capital -- in fact, at a lower rate (municipal bonds).
But now that the mistake has already been made decades ago, how does one 'un-profit' a for-profit company? The shares that traded last week on the exchange were bought or sold by people who had an expectation of the for-profit nature of the company. And that is the tough problem.
What we should be asking is, what mistakes are being made today that in a few decades time will look like huge mistakes? Building a privately-funded army is near the top of my list. Privatizing water is at the top.
Non profits may be able to raise capital for the ongoing service levels by issuing bonds, however they could not generate the billions of dollars needed for construction of new generation plants and environmental upgrades to existing plants. Remember, every time a governmental nonprofit issues bonds there has to be a tax increase to cover it!! The increased tax would far outweigh the cost of electric today in the Midwest. On the East and WEST the cost of electric is more than twice the cost in IL and 3 times the cost in MO.
A non-profit municipal utility could borrow money for new construction. The new construction would be covered by the cost of service to the new areas being covered.
Unlike, say, borrowing money to build an amusement park or new factory or whatever, the consumption and therefore the revenue of the area being expanded into is highly predictable. The bonds could be borrowed commercially or if borrowed as a municipal expense, covered by the monthly electric bills of the covered parties.
Post a Comment