Will rural customers enjoy all the benefits of competition?
Myth: Suppliers will not want to serve rural customers in competitive markets because they are widely scattered and too expensive to reach. Reality: The biggest expense of reaching rural customers—the power lines that connect to their homes and farms—are already in place and will not be impacted by proposals to give customers a choice of suppliers. Similarly, the companies and systems that deliver electricity will remain essentially unchanged. (Electric restructuring would allow competition in the generation business; however, transmission and distribution systems would remain regulated as they are today.) Many rural customers, for example, could continue to receive affordable, reliable service from rural electric cooperatives. Once you cover the cost of hooking a rural customer to the grid, that customer is no more expensive to serve than a customer in a big city. Giving all customers choice will not prevent the Rural Utility Service (RUS) or others from continuing to provide low income loans and other financial assistance to distribution cooperatives. These programs can continue to help offset the higher cost of distributing electricity to rural areas. Another commonly expressed concern is that rural electricity customers will have fewer service options in a competitive industry, because that is what happened in the period following airline deregulation. It is important to recognize the difference between the two industries. The "wires" that connect rural electricity customers to existing suppliers will not be eliminated by giving customers a choice of suppliers. Unlike airlines facing an additional expense to reach rural customers, electricity suppliers will be competing to supply power over existing lines. The better analogy is to phone service, a pre-wired industry where rural customers have seen an increase in service options. The notion that different types of electricity customers are in some sense "harder to reach" and therefore less attractive also fails the physics laugh test. Electricity moves at the speed of light—186,000 miles per second. Electrons can physically be moved from Pennsylvania to Peoria or from Washington to Wyoming in nanoseconds. Rural customers already connected to the grid will be in no way isolated from a broad spectrum of competitive power suppliers ready, willing, and able to compete for their business.