ARLINGTON, VA — In written testimony submitted to the Federal Trade Commission on March 30, the Air Conditioning Contractors of America (ACCA) urged the commission to take federal action to prohibit cross-subsidization by the nation’s utilities entering into non-core businesses. In its testimony, ACCA said such a step is necessary “in order to guarantee competition that is open and fair.”

While ACCA and its members support the free market and fair competition, ACCA President Larry Taylor said contractors oppose a utility’s entry into the hvacr field when ratepayers are subsidizing that entry.

“All over the country, utility companies are using ratepayer dollars to subsidize the utility’s entry into non-utility businesses,” said Taylor, who is also president of Air Rite A/C Co., Fort Worth, TX. “Not only is that entry unfair to legitimate small businesses and to ratepayers, it is inappropriate in this time of a national energy emergency. Utilities ought to get back to doing what they are expected to do — provide for the safe and efficient distribution and transmission of energy.”

According to Taylor, ACCA supports definitive language prohibiting cross-subsidization in any federal legislation or regulation dealing with the deregulation of the retail sales of electric power. In the eyes of ACCA, such actions must include a definition of cross-subsidization sufficient to capture transfers of both tangible assets (shared tools and equipment), as well as intangible assets (shared logos and trademarks). At the very least, ACCA said it believes that federal actions must condemn cross-subsidization as contrary to the goal of fair and open competition, and provide specific examples of inefficient cross-subsidies to guide state commissions in their consideration of the many issues surrounding electric deregulation.

For a copy of ACCA’s written testimony to the FTC, contact John Herzog at ACCA (703-575-4477) or visit ACCA’s website, www.aca.org.

Publication date:04/09/2001