This letter to the editor originally appeared in TCPalm:
There is a recurring problem with the Fort Piece Utilities Authority, and it’s hurting customers. Nobel Prize-winning economist Friedrich A. Hayek would have pointed out it is an inevitable consequence of government meddling in the utility market.
In our case, FPUA is blindfolded from important business signals and we, FPUA customers, have to pay dearly for it.
Prices are set in the market from competition and voluntary exchange. Competition drives producers to lower costs to be more competitive, and consumers’ free choice forces suppliers to deliver high quality at an affordable price.
Every other business competes in a crowded room for sales, but FPUA “sets” prices insulated by government protection.
FPUA may work to lower operating costs when there is enough public outcry. Without competition, however, there is no one pushing for more.
Let’s look at the numbers. In Florida, 2009, the average residential revenue was $12.8 per kilowatt hour for publicly owned providers like FPUA. Investor-owned utilities, like FPL, operated at $12.4 per kilowatt hour and co-ops came in even less at $12. FPUA was listed at $15.3 per kilowatt hour according to 2009 reports, above all indexes.
Thankfully, competition in utilities is spreading across America, and its benefits provide for better utility services at lower rates with happier customers.
Economist Walter Primeaux’s book, “Direct Utility Competition: The Natural Monopoly Myth,” studies existing American markets where competition in utilities exists and its benefits, showing that not only can it be done but it is already being done right now.
The FPUA and the city’s goal with utilities should be higher quality at a lower price, not treating utilities as a piggy bank.
Jobs and economic development would see a direct boost, and consumers would see more disposable income. Repealing the monopoly of utilities is the only way to accomplish this goal.
Source: Letter: Let’s repeal monopoly of Fort Pierce Utilities Authority – TC Palm