A question from Andy Walker of Golden, CO:
The U.S. Federal Government is the single largest energy user in the world. Are there any efforts to use this leverage to ensure that the government, and thus the taxpayers, benefit rather than suffer from deregulation?
Rep. Dingell responds:
This question goes to the fundamental issue of whether or not competition will lower rates in all circumstances. As you know, the federal government has facilities in every state, as well as abroad, and as a consequence pays different rates in various locales. My general feeling is we ought to look before we leap, and not embark on a deregulatory or pro-competitive national policy until we have an better handle on the likely result.
I would also point out that for a number of years the Defense Department has looked for opportunities to reduce its costs. Sometimes we have been able to assist in this effort, by approving proposals to upgrade or sell off antiquated on-site electric distribution facilities. On a larger scale, however, the government is in the same position as any other consumer and will benefit from well-balanced policies but face risks if the consequences of change are poorly understood and hastily executed.
Rep. Schaefer responds:
You are right -- the Federal government is the single largest electricity
consumer in the country, spending approximately $3.5 billion annually for
electricity. The Federal government puts out competitive bids for almost all
supplies and products it purchases -- except electricity. The Federal
government -- just like consumers, has no choice but to purchase electricity
from monopolies that serves the areas near military bases, post offices, and
large Federal buildings. The end result is the taxpayer is paying a much
bigger electricity bill than they need to. If competition lowered electric
rates by 20 percent the U.S. taxpayer would get a tax cut of $3 billion over
five years. That is real money.
There have been efforts to let the Federal government have choice in electric
suppliers before small consumers. In particular, there were proposals to let
the military and Amtrak buy electricity competitively. I opposed these
efforts out of concern that if the big electricity users eat first, the
little dogs will be left with only crumbs.
Continue to additional comments...