In Defense

09.20.12

Edison Electric Institute Is Wrong to Deny America’s Coming Infrastructure Crisis

The president of Edison Electric Institute argued with David Cay Johnston’s Newsweek piece on America’s coming infrastructure crisis. The author responds that the industry is playing fast and loose with the facts.

Thomas R. Kuhn, president of Edison Electric Institute, takes exception to the facts in the adaption from my new book The Fine Print, published in Newsweek’s Sept. 10 issue. Problem is, Kuhn (or the EEI staffer who wrote the letter with his name on it) plays fast and loose with the facts.

Kuhn asserts that an “especially misleading statement made by the author is that ‘many utility rates have risen much faster than inflation.’”

So what do the facts show? First, my words were not limited to electric utilities, but included telephone, cable, water, and other utilities. But let’s test the integrity of Kuhn’s statements by looking only at electricity prices in real terms from the official data, the federal government’s Energy Information Administration.

The average residential electricity per kilowatt hour rose at inflation plus 8 percent from 1999 to 2010. Add in industrial, commercial, and other uses and real prices rose on average 13 percent.

In states with supposedly competitive markets, prices rise much more. For residential customers they rose 43 percent in inflation-adjusted dollars, while overall electricity prices rose a whopping 48 percent.

Mr. Kuhn’s letter exemplifies the kind of deceptive information for which the corporate-owned utilities he represents are justly criticized in The Fine Print.