The Marietta Daily Journal reports that the city of Marietta, which has invested taxpayer dollars in traditionally private ventures – including a hotel and conference center and a broadband network that lost millions – is jumping into competitive markets again.
The city recently filed an application at the Georgia Public Service Commission seeking permission to market natural gas statewide to Georgia’s 1.6 million natural gas customers under the brand, “MNG,” a Limited Liability Company the city created to compete against businesses.
The request was denied by the PSC in a 4 to 1 vote. Marietta appealed the PSC’s decision to Fulton County Superior Court, which sided with the city. The PSC appealed to the Georgia Court of Appeals, which has not yet ruled on the case.
It has been 20 years since the sale of natural gas was deregulated in Georgia. Deregulation introduced competition, choice and lower natural gas prices for homes and businesses.
The decision to deregulate Georgia’s natural gas market was made by the General Assembly and implemented by the Georgia Public Service Commission. It attracted marketers offering lower rates and better service to consumers.
Twenty-nine companies tested Georgia’s new natural gas market. But like any competitive market, there are risks to competing – and winners and losers. Four marketers declared bankruptcy. Six entered the market and bailed out, and two invested in startup costs but never served a customer and had their certificates revoked by the PSC.
The hallmark of any competitive market is fair competition. Yet Georgia consumers may get another dose of direct mail advertising, and radio and TV ads compliments of – not their natural gas provider – but their local government, backed by taxpayer dollars to compete against private businesses.
It is not uncommon for local governments to provide traditional utility monopoly services. However, the sale of natural gas was deregulated, and Marietta is asking to compete against private companies statewide.
In denying the city’s application, the PSC ruled it would create unfair competition in the competitive market. The PSC also recognized that the General Assembly did not intend for a government entity to enter the new competitive retail natural gas market.
The case now moves on to the Court of Appeals, which will determine whether the PSC or the Fulton Superior Court were correct in their view as to whether government should compete in this competitive market.
Free enterprise is an economic system that rewards investors and business owners when the right decisions are made – and penalizes poor decisions, up to and including bankruptcy.
With a potentially unlimited source of taxpayer dollars to invest in new ventures – where do we draw the line to keep government-funded enterprises from competing against private business?
Taxpayer-backed governments, such as the city of Marietta, will introduce an anti-competitive element into the Peach State’s deregulated, competitive natural gas market.
Where services are readily available from private companies in a free enterprise system, governments should not be allowed to enter given their inherent anti-competitive effects on the market, which is probably why the General Assembly did not authorize cities to compete as retail gas marketers.
An essential element of the free enterprise system is limited government. When governments utilize taxpayer funds to compete in the free enterprise system – to compete against the very organizations they taxed – we not only have government using taxpayer funds to compete with private businesses, we have abandoned the principal of limited government.
Phil Kent is the CEO & Publisher of InsiderAdvantage & James magazine.
