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UtiliCorp CEO Advocates Deregulation Push
State-by-state regulation is holding back the development of amore competitive U.S. energy economy while other countries alreadyare benefiting from deregulation — something that regulators needto realize, the CEO of UtiliCorp United told energy executivesyesterday.
Speaking to the Association of Energy Services ProfessionalsInternational in Vale, CO, Robert K. Green said that “Internet isking” in the new economy, which requires a major shift in howinvestors think. The old order of business relying on “land, laborand capital” is no longer the road to success. Green saidbusinesses would be built outside of the United States and indomestic markets where energy regulation is no longer a factor.
“The problem in the United States, and especially in California,is that regulators continue to apply the old command-and-controlregimes based on cost of services and regulated rates of returnthat seek to match prices with costs,” Green said.
As an example, in Germany, industrial electricity rates havedropped 60%, and in the United Kingdom, natural gas rates underderegulation have dropped 20%, making European natural gas “cheaperthan gas in the United States,” despite the fact that UK naturalgas comes from “expensive North Sea wells,” he said.
The new economy also has to become more reliable than in thepast, he warned. “The factories of the Old Economy would hardlyblink an eye if there was a momentary outage. But with today’sdigitally run plants, even momentary outages require the wholesaleresetting of computer-driven systems. And as business moves onlinein a 24-7 basis, cutting off power will be like cutting off theirlifelines.”
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