--continued from page 3

What a Circle, What a Racket!!
Page 4

Isn't the cost of drilling new wells part of the normal activities necessary for a natural gas company to operate? Shouldn't it be looked upon as a normal cost of operation? Why should consumers be charged because gas company officials failed to look ahead and do their job? As a public utility, are they not suppose to provide natural gas as economically and as efficiently as possible?

     Public Utilities

"A public utility is a business considered so important to the public welfare that it is subjected to some form of GOVERNMENT REGULATION or ownership. Often the business is a natural monopoly, meaning that efficiency requires a single company (a monopoly) or, at most, relatively few companies in the industry.

Regulatory agencies are charged with the responsibility of protecting the public interest by setting utility rates and requiring appropriate services. Rate setting involves complex problems. If the rate is set too high it will be injurious to the public interest, whereas if it is too low the utility will not be able to attract the capital investment necessary to operate efficiently. Thus a regulatory agency must devise a formula that permits the utility to earn a fair rate of return on capital.

The U.S. regulatory system has been subjected to much criticism in recent years. Some persons argue that the regulators have become captives of the public utilities they regulate and that the public interest is not being properly protected.

Copyright (c) Grolier Electronic Publishing, Inc.

Although the natural gas industry once was a natural monopoly, this is not necessarily the case today because of Deregulation. Perhaps this is where part of the problem is.

Case In Point

Many electric utilities went to natural gas

Unanswered Questions

  • Were the natural gas companies not forewarned in enough time to take action?
  • Why didn't the oil and gas industry respond ahead of time to the call for these additional energy needs by drilling new wells on time?
  • Are they not professionals at what they do?
  • Don't they have the public's interest at heart?
  • Or, did they deliberately sit on their rears, knowing that eventually they would be able to jack up the price of natural gas and crude oil byproducts, thus earning more profits per share for their stockholders?
  • Why do we continue to reward unprofessionalism with more money?
  • Is something terribly wrong with this picture or is this author's glasses just fogged up for nothing?

I'm not an expert here, so please lend me your opinion--Is there something wrong with this picture (my e-mail, and thank you)? Perhaps there is another reason for all of this. Please click HERE to learn about it.


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Allan B. Colombo
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