1.14.2009

This is Why Monopolies Are Bad.

As everyone knows, I have no love for corporations, and I particularly loathe companies that do business in a pseudo-monopolistic manner. Take, for example, utility companies.

Last month, I received my monthly utility bills, and much to my pleasure I had lower than expected bills. I had worked to be able to conserve both energy and money by purchasing energy efficient electric heaters so I could turn down my ridiculously expensive gas heat, and installed all of those nifty spiral shaped energy efficient light bulbs, new appliances, and so forth.

I worked diligently in conservation by multi-tasking my appliances so that they required less energy from constant start and stop use. I used my heat sparingly, only on the coldest mornings. I had my (main) electric bill come in at $130, and my gas bill was a super low $75.

The month of December was no different. Not in temperature, or behavior. I only used my heat about four times, a few hours in the mornings, and all day on Christmas. I only turned on my Christmas lights a week before Christmas, and used battery powered lights for everything but the front porch and tree.

This month, my electric bill came in at a whopping $260, and my gas bill shot up to $202. At closer inspection, I noticed that the bills went up due to a sizable rate increase.

Now here's the monopoly part of it, my utility companies are monopolies in my area. Both my gas and electric are part of one large company, and, they are the only companies you can use here. I can either purchase my power from them, go without, or create electricity with slaves and hamsters.

These companies constantly tell their clients to conserve energy, and yet every time we do, they raise the rates. To make matters worse, we must use their services. How is this remotely fair to consumers?

There comes a breaking point where everyone will either conserve these companies right out of business (while also being quite out of power and heat to do that) or, we will be stuck paying enormous rates, using only as much as we can spare, which is still too much.

This is why monopolies are bad. They have consumers by the gonads, and there is little we can do about it.

Keep in mind, friends, that this didn't happen until our state deregulated these industries in the name of "free market capitalism". Before this, we would experience rate hikes occasionally, but it was never out of control like this. The utility companies refuse to allow competition into the area, and yet are not required to exercise an ounce of control.

They are now averaging 3 rate increases per year. Our economy cannot support this, and yet the parent company, and the individual companies are making money hand over fist. (In case anyone is wondering, yes, I watch their quarterly profit reports).

This is gouging - and very concrete evidence to my assertion that free market capitalism with regards to necessary products and services allows for monopolies, and thus consumer gouging.

I have written once before to the state Attorney General about this, and I feel it's time to write again. Our governor must put strict regulations back on these companies, and force them to compete with other companies.

If they are not controlled sometime soon, I'm afraid we will literally be powerless.

11 comments:

Houseonahill said...

That is so true. They slip in the "hidden" fees, late fees, taxes and now, as of late, they charge you to pay online, or from their site, there are so many little unwarranted "tips" they give themselves!

We are getting it from all sides with no end in sight...

Kobra said...

http://en.wikipedia.org/wiki/Perepiteia

If this works, it is the answer to your problems. :P

Anok said...

HoH - you have no idea. They charge service fees, delivery fees, customer service fees, customer service fees for delivery fees I mean, it's outrageous. The explanation of charges is like reading a small novel.

Voodoo - interesting concept. I would think that it isn't very practical, though. Not for home use. We're still trying to figure out and are working on a hydro-electric type of generator for home use. It's possible, it's just a matter of building it, and figuring out how to connect it all up. I'd still be on the grid, and using a very tiny portion of electricity to start, but would actually create more energy than I use, thus putting that back into the grid, negating any expense I had in the first place.

Anonymous said...

and this is why i am a socialist. you'll never be able to force them, through capitalism, to "compete" to your (the consumer) advantage. it flat out will never work that way. they will collude to maximize profit and if regulation is imposed to counter that tendency, they'll work to have the legislation overturned.
period.
loj...

voodooKobra said...

"I would think that it isn't very practical, though. Not for home use."

O Contraire! As soon as physicists understand what makes it tick, I'm going to build a smaller-scale version to be used in portable electronics. My laptop battery will never die again. :D

Anok said...

You aint lyin' Jazz. And if they can't find ways to overturn it, they find ways around it. Like in added "service fees". Meh.

Voodoo - sweet. When you build one, send me the diagram, will ya? Then we can tell the utility companies exactly where they can put their rates.

vijayanths said...

You have very good blogs here Anok.

voodooKobra said...

I'll do you one even better: I'll send you all the pieces as well.

tikno said...

You are right, Anok.
The monopoly system curbed the freedom of the consumer to choose.

Kiefers Corner said...

We just had a 25% increase in electric in central Florida and now they are going for another 25% for the end of the year.

The best part is we only have one electric company, so its take it or leave it.

There should always be a competitor for any service.

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