State utility ratepayers now have a clear bill of rights

Mississippi is a diverse state, but one thing most of us have in common is being “ratepayers.”

And now, thanks to a more politically active Public Service Commission, we have a bill of rights when it comes to our dealings with those to whom we pay “rates” — for telecommunications, electric, gas, water and sewer utilities.

For those who aren’t familiar with a PSC, here’s a primer:

n Back when free enterprise was paramount and government was merely an onlooker, there was a distrust of “monopolies.”

n By definition, a monopoly is a business that has the market for a commodity locked up and, as a result, has no competition.

n The danger is that when only one seller provides an item — air travel, blue jeans, green beans — the price to the consumer will edge higher than natural market forces would normally require.

n Yet when it comes to utilities, a monopoly is far more efficient and, in some cases, much cheaper. (Imagine a neighborhood with four water companies running new lines every time a customer wanted to buy from a different seller.)

n To resolve this, states created PSCs. The premise was that private companies would be allowed to operate utility monopolies, but their rates would be under state control so as to allow only a reasonable return on investment. So, PSCs (1) guarantee ratepayers they won’t be gouged and (2) guarantee utilities exclusive service areas.

Sun Herald
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