Fiat lux - political desperation in Gov Mario Cuomo's proposal for New York State to run the Long Island Lighting Co. and reduce voters' electric costs - Editorial

National Review, Nov 7, 1994

NOTHING is more symbolic of Mario Cuomo's limitless faith in government than his eleventh-hour pre-election proposal to spend $9 billion of New York taxpayers' money to take over the Long Island Lighting Company. Promising a 10 per cent reduction of utility rates to the crucial Long Island voting area, Governor Cuomo is actually asking people to believe that the same state government that spent at several times the inflation rate and taxed heavily to fund explosive mandates on Medicaid, welfare, and education, with a resulting massive job loss and decaying economy, deserves to expand its operations by going into the utility business.

There is no question that Lilco's private electricity monopoly is costly and inefficient, but turning it into a state monopoly is surely not the answer. Instead, competition should be promoted through a deregulatory policy that allows "retail wheeling." In recent years the development of long-distance transmission lines has enabled hundreds of independent power producers to link together in a new electricity superhighway. This would permit electricity consumers to purchase cheap power from the seller of their choice--if government regulation didn't stop them.

Private monopolists such as Lilco oppose deregulatory access to cheaper electricity because the current system subsidizes their poorly run business and keeps them afloat. They have been joined by antibusiness environmentalists who want to protect demand-side management schemes that use utility monopolies to hold down consumption in the name of conservation.

GOP gubernatorial candidate George Pataki should dismiss Governor Cuomo's takeover scheme as another goofy governmental power grab. Moreover, in a state that has lost nearly 500,000 jobs in the last four years and that suffers from one of the largest tax and utility cost burdens in the nation, Mr. Pataki should complement his pro-growth taxcut plan with a clear deregulatory strategy that would substitute market competition for private/public monopoly. Then New York businesses could truly plug into the global economy.