WASHINGTON -- Electricity rates would rise in Utah and 18 other states if the government deregulates the power industry and more utilities compete for customers, an internal Agriculture Department study says.
The study does not dispute the Energy Department's estimates that consumers nationwide would save $20 billion a year from deregulation. But the department says it would take a subsidy of $1 billion to $2.4 billion a year to keep consumers in those 19 states from being hurt.Summaries of the study, which is not final, have been circulating on Capitol Hill. The administration is expected to introduce a deregulation bill soon.
Roger Ball, administrative secretary for the Utah Committee of Consumer Services, said he has not seen the study. But he said its conclusions seem to support the go-slow approach Utah legislators backed during the last session, when they decided against moving forward with deregulation while continuing to study the issue.
"One of the arguments we've put forward all along is that energy costs in this area are relatively low," Ball said. "If (prices) go to a regional average, taking in California, for example, things tend to go up."
He said the committee, a state agency designed to look out for residential, agricultural and small commercial utility users, is still studying the Clinton administration's proposed Comprehensive Electricity Competition Plan, which was released last year.
"That needs further looking at," Ball said. "Consumer advocates from around the country are concerned about it."
The USDA study warns that rural electric cooperatives stand to lose their industrial customers under the plan and would be further hurt if the government were required to start selling its hydropower at market prices.
Energy Department officials dispute the study's findings, arguing that every state will benefit from deregulation, albeit some more than others.
In addition to Utah and the Dakotas, the study said other states that would see higher rates are Alabama, Colorado, Idaho, Indiana, Kentucky, Mississippi, Montana, Nebraska, North Carolina, Oregon, South Carolina, Tennessee, Utah, Washington, West Virginia, Wisconsin and Wyoming.
Deseret News business writer Gregory P. Kratz contributed to this report.