Speeches by Fidel Castro Ruz, President of the Republic of Cuba

Embassy of Cuba in Canada
August 29, 2003

  • “Thank You Führer.” Editorial published in the newspaper Granma on May 21, 2003.
  • Press conference by Foreign Minister of the Repúblic of Cuba, Felipe Pérez Roque on the mercenaries at the service of the empire who stood trial on April 3,4,5 and 7, 2003. Havana City, April 9, 2003.
  • Letter to the Editor, National Post (Financial Post) January 1, 2003.
  • Letter to the Editor, National Post (Financial Post) January 13, 2003.
  • Letter to the Editor of The National Post (Financial Post) January 1, 2003.

    Dear Sir:

    Regarding the article published on Saturday, January 18, 2002, “Bad Cuban Medicine” by Lawrence Solomon.

    For the second time in less than two weeks Mr. Solomon has offered the Post’s readers his mistaken understanding of Cuba. The target on this occasion is the Health Care System.

    In May 1998, Mr. Hiroshi Nakajima, Director-General of the World Health Organization, said that “Cuba’s national health system, with its emphasis on primary health care managed by a “health team,” is widely considered to be exemplary. Few developing countries have adopted such a comprehensive range of health policies, geared to priority needs and the capacity of health workers to meet them, on behalf of all Cuban people, particularly the most vulnerable and impoverished.

    It would be too lengthy to answer each and every one of the superficial allegations of this article. But the following figures can give an idea of how wrong is Mr. Solomon’s characterization. The Panamerican Health Organization, the United Nations Economic Commission for Latin America and the Caribbean and the CIA World Fact Book 2002 have all published their assessments of health care conditions in Cuba and other countries of the world. Among the findings, let me point out the following:

    Child mortality in Cuba: 6.5 per thousand live births.
    United States 6.7, Mexico 24.9, Argentina 16.6, Brasil 31.8.
    Life Expectancy in Cuba: 76.6 years.
    Russia, 67.3, Nicaragua 68, Colombia 70.7.
    Medical Doctors /10,000 inhabitants in Cuba: 59.
    United Sates 27.9, Chile 13, Colombia 1.5.
    Hospital Beds /1000 inhabitants in Cuba: 6.3.
    United States 4, El Salvador 1.6, Guatemala 1.
    Proportion of under-5 registered deaths due to intestinal infectious diseases in Cuba: 2%.
    United States 1%, Mexico 6%, Brazil 7%, Dominican Republic 8%.
    Proportion of under-1 population vaccinated against poliomyelitis in Cuba: 100%.
    United States 91%, Mexico 89%, Dominican Republic 83%.
    Cuba has the lowest rate of HIV positive patients of any nation in the world. There are 2,500 HIV positive patients in a nation of 11 million.

    Cuba is currently helping 20 countries of Latin America, the Caribbean, Asia and Africa in the health care field with 2,914 medical doctors and technicians at no cost for the recipient country. We also have more than 4,000 students from 23 countries receiving medical training in Cuba and who graduate as medical doctors at no cost for them and their countries.

    Counting just the victims of Chernobyl, more then 18 thousand children have enjoyed free medical care and treatment in Cuba. Medical attention for tourists or foreigners who pay for the service does exists and it has a marginal impact. Less than 1% of hospital beds are destined to such purpose.

    When these facts are so clear and illustrations are so abundant, one wonders why a journalist would attempt to portray such a false picture. Further, it also prompts the question as to why a newspaper would publish such a story without fact checking.

    Vladimir Mirabal, Press Attaché, Embassy of Cuba


    Letter to the Editor of The National Post (Financial Post) January 13, 2003

    Dear Sir:

    Regarding your Saturday, January 11, 2003 article “Cuba’s cruel joke” written by Lawrence Solomon.

    Your column, introduced as the “first in a series,” is a gross misrepresentation of facts with a very creative spin. Cuba is a developing country, undergoing severe economic constrains. Its GDP is a fraction of Canada’s, the US or any member of the OECD. It is not a country with rich natural resources and it has suffered for the past 44 years a relentless economic war carried out by the most powerful nation that has ever existed.

    It is no surprise for most observers of Cuba that the standard of living of Cubans is below your typical expectation in North America, and that the country faces uncommon challenges in its development objectives. Cuba is perhaps the only developing country that receives absolutely no financial loans from the World Bank or the IMF, that receives no preferential financing from any bilateral source whatsoever and that is forcefully exempted form accessing the most lucrative and dynamic market for the export of its goods and services. [We do not have the luxury to develop a sophisticated industry for pet food, and therefore it is common for people to collect leftovers for their pets].

    In spite of all of that and quite contrary to what the article pretends to portray, Cuba has been able to build a very equitable society in the ocean of inequality that surrounds it. The World Bank, which is no fan of Cuba, has reported on the unquestionable advances in social development and equity. It has gone as far as to recognize Cuba’s achievements in economic and financial stability. In important indicators such as child mortality rates, life expectancy, real income distribution, literacy, school enrollment, university graduates, average medical doctors per capita, average hospital beds per capita, sports achievements, artistic education, participation of women in society, vaccination programs, scientific development, real carbohydrate and protein consumption and many others, there is no country in Latin America and the Caribbean that can match what Cuba has accomplished. In many of these indicators it leads in the whole hemisphere.

    It is true that a rationing system continues to exist for some essential material necessities. Though not perfect, it will not allow any human being to be discarded or forgotten by society, this including the secure distribution of one liter of milk a day for every child under seven years of age. It is our way to ensure, in our conditions, a fair response to a set of a minimal needs, in addition of what is available for everyone in the market, regardless of the economic means and capabilities of each and every citizen in the country. Hundreds of millions in Latin America and many in North America could benefit from an assured access to what already every Cuban enjoys.

    Without pretending to answer each and every miss representation in the column, historical facts must be recalled. The Economic Commission for Latin America, UNESCO and the World Bank recorded in the 1950s their assessment of Cuba and it was far from the heavenly picture that the article tries to portray. Cuba was a playground for foreign interests, with a backward economy and a corrupt and extremely unequal society, where crime, prostitution, gambling, drugs and racism colored the landscape. Today that is certainly not the case.

    The core message of the article seems to be in the last sentence, calling for the government to do “much, much less.” Such call reflects more an ideological impulse than an informed understanding of Cuba and the region in which we live in. However, it does not explain the motivation behind the untruthful depiction of a country striving to do better for its people.

    Vladimir Mirabal, Press Attaché, Embassy of Cuba


    “Thank You Führer”

    We really have reasons to be happy. Yesterday, May 20, 2003, as they commemorated the 101st anniversary of that sad and shameful day on which, after the destruction of Jos­é Martí’s party and the disarming of the Liberation Army, they awarded us the caricature of a republic with the Platt Amendment and the U.S. right to intervention, we received a very sweet, moving message from Mr. Bush which literally read:

    “Today, Cubans around the world celebrate May 20th, Cuban Independence Day. On behalf of the people of the United States, I send greetings to the Cuban community. My hope is for the Cuban people to soon enjoy the same freedoms and rights that we do. Dictatorships have no place in the Americas. May God bless the Cuban people, who are struggling for freedom. Thank you.”

    Of course, it had to be yesterday that the subversive, perfidious radio station, to which they have offensively given the name of Jos­é Martí, went on air with four new frequencies and, under the tolerant eye of U.S. authorities, a notorious Miami terrorist flew off the 12 mile limit along the sea corridor between Boca de Jaruco and Matanzas, testing TV broadcasts to Cuba in shameless violation of the existing international regulations on such matters. Of course, an individual such as he and others who are in the service of the U.S. government will never do time in the outrageous cages where citizens from dozens of countries are locked up, with no regard for law or custom, in the Cuban territory of Guantánamo, forcibly occupied by the United States.

    In addition to the above, and as a special surprise from the Bush administration, closely guarded as a great war secret, the TV signal went on air from six to eight in the evening over channels and systems used by Cuba in several provinces for educational, news or recreational programming.

    In fact, those broadcasts were no technical feat to be proud of as very few people heard their noises.

    The U.S. government should not forget that Cuban radio could be heard on medium wave in many U.S. states.

    Is this by any chance another blatant and rude provocation against Cuba?

    On the other hand, an AFP wire datelined Washington yesterday said that “George W. Bush’s government had not yet completed its ongoing review of its Cuba policy to respond to the recent repression of dissidence, Republican congresspersons Lincoln and Mario D­iaz Balart and Ileana Ros Lehtinen announced Tuesday.”

    As we all remember, they were the same who along with the U.S. ambassador to the Dominican Republic, intimate friends of the brilliant Mr. Bush and of “Baby” Jeb of the same last name and the governor of Florida, recently said that after Iraq, Cuba would be next.

    Our fellow Cubans can appreciate just how extraordinarily honest and merciful was the U.S. government’s message to the Cuban people, how incredibly patriotic are those they call “dissidents” who, up to their necks in the empire’s dollars, struggle for Cuba’s freedom and independence.

    The big bad wolves disguised as grannies are not fooling anybody nor will they be able to. If Mr. Bush does not know, yet, what measures to take, the Cuban people have absolutely no doubts about their duty. Such sugary and cynical maneuvers will not persuade anybody that Cuba is not in danger.

    Nor have those who gobble up Little Red Riding Hoods abandoned the idea of keeping the Damocles sword of economic measures and others of a similar punitive nature against the Revolution hanging over our heads. All measures announced or foreseen as possible options to tighten the blockade and strangle our economy have been analyzed. None of them will have the success they expect.

    We simply do not believe them when now, trying to make amends for their stupid threats, they allege that all options other than an invasion are being considered. They said the same thing after the mercenary invasion by the Bay of Pigs and before the 1962 October Crisis, while as of March 1962 they already had drawn up and approved more than 15 pretexts (to invade) that seemed the output of a veritable Olympiad of cynicism, vileness and infamy.

    Nor do we believe them when they say they are worried about possible massive exodus, something they in fact are trying to provoke.

    Their economic blockade, their efforts to create additional difficulties of that nature, their murderous Cuban Adjustment Act and their shameful threats to do the same thing in Cuba as they did in Iraq only serve to increase the number of potential emigrants in Cuba. The aim of such provocations, as we know only too well from both private and public statements by major ringleaders of the Miami terrorist Mob and the extreme right, is to cause incidents that could be used as pretexts for an attack against our people.

    Of the select group of 11 who were invited to celebrate the ill-fated and shameful date of May 20 at the White House, three are well-known terrorists:

    1.     Eusebio de Jesús Peñalver Mazorra. U.S. authorities in California arrested him on December 12, 1995 – in Clinton’s days – when he was involved in preparations for an armed raid against Cuba and a cachet of weapons in his possession was seized. He is linked to terrorist Luis Posada Carriles who is in jail in Panama for his plan to explode 48 kilograms of dynamite in a students meeting which the President of the Cuban Council of State was scheduled to attend.

    2.     Ernesto Díaz Rodríguez. In 1999, he was involved in a plan to assassinate President of Venezuela Hugo Chávez. He traveled to Venezuela during the 7th Ibero-American Summit on Margarita Island to try and carry out actions against the Cuban delegation. On the same occasion, close to Puerto Rico, the U.S. Coastguard seized a boat headed for Margarita Island carrying two .50 caliber rifles with telescopic sights, which were to be used to assassinate the head of the delegation, Comrade Fidel. Leaders of the Cuban-American National Foundation were the owners of both the rifles and the boat. Despite this being a proven fact, those involved were acquitted thanks to the leverage of and pressure from the Miami terrorist Mob.

    3.     Ángel Francisco D’fana Serrano. A counterrevolutionary, who served a prison sentence in Cuba for his direct participation in terrorist actions.

    Although these men spoke very confidentially with Mr. Bush, you can be sure that, given the composition of the group, he did not tell them anything about his intimate plans and his commitment to get rid of the Cuban head of state, which he made with the leaders of the Cuban-American Mob that so diligently and through fraud raised him to the presidency of the United States.

    However, they should be in no hurry to believe that the dangers lying in wait and their sinister plans could keep the Cuban people and their leaders sleepless. Cuba’s fundamental concern does not stem from problems associated with its own security. At the Bay of Pigs, during the 1962 October Crisis, when the European socialist camp and the USSR itself were falling to pieces and in the last 20 months since the atrocious attack on the American people in New York – which was turned into a source of hysteria, a pretext to threaten 60 or more nations with pre-emptive attacks and to strike remote and dark corners of the world with weapons of mass destruction, as sworn before a God who, according to the creator of this fundamentalist fantasy is not neutral – the world has been witness to the dignity and bravery of the Cuban people; a truly heroic people that, when many cowardly, mediocre and ignorant politicians were incapable of seeing that the terrifying reality of a Nazi-fascist tyranny was haunting the world, did not hesitate to denounce it. Those governments or individuals that keep a disgraceful silence in the face of such events fail to have the slightest moral authority to criticize a country like Cuba, which defends its most sacred rights. History will bury them along with their cowardice, their complicity and their lies!

    The pictures of millions of men and women demanding their independence, freedom, respect for their religious and ethical values and the return of their resources conquered by force in a country invaded without any legal or moral justification, should be reasons enough to make sane political leaders come to their senses. Such problems will never be solved with bombing and missiles, tanks and guns, nuclear, biological or chemical weapons.

    Mr. Bush, the man behind the bombings of cities that when shown on television moved and shocked the world, leaving traces indelibly etched on the lives of millions of children, mothers and elders who suffered those attacks worthy of Dante’s inferno, promises that Cubans will soon be free and says that “dictatorships have no place in the Americas.” This, fortunately, is absolutely true.

    The American people will grow tired of his ridiculous ideas and his bigotry, which can lead, among other things, to economic and ecological catastrophes. Latin America and the Caribbean will never tolerate his plundering FTAA, which he wants to use to snatch their sovereignty and their resources away from them, and much less will they resign themselves to his Nazi-fascist world tyranny.

    Mr. Bush: we extend our deepest gratitude to you for your amazing kindness and your infinite generosity to Cubans on this May 20, 2003. You will see the deep emotion and affection we shall display to welcome you to the land of Martí and Maceo, of Camilo and Che!

    Editorial published in the newspaper Granma on May 21, 2003

Posted in Culture, Regulation | Leave a comment

Why we should conserve

Lawrence Solomon
National Post
August 28, 2003

Some Ontarians don’t understand why they should conserve electricity, as Ontario Premier Ernie Eves implores them to do. For these dunderheads, let me connect the dots. 1. Eves’s price freeze caused consumption to rise.


Credit: Andrew Barr, National Post

Last fall, following a period of high prices, Eves froze the rates that consumers paid for their power at 4.3¢ per kilowatt-hour, about half the rate for power that they had then been paying. Eves even maintained the price freeze during the recent blackout, when his government was buying electricity wholesale at prices well above the 4.3¢ at which it resold electricity. Because he artificially cheapened the cost of power, consumers naturally used too much of it.

Eves needed the price freeze as a short-term measure, to get him re-elected in what seemed an imminent election call. Unfortunately for him and his re-election team, the polls swung against Eves, forcing him to postpone the election. Unfortunately for Ontarians, the freeze also stayed in place.

To end the current power shortages, Eves needs only to let power prices rise and fall with demand. But ending the freeze would cause Eves to lose face and harm his re-election prospects. Since this is a non-starter, Ontarians only practical recourse – and one they should definitely take up if they want the lights to stay on – is voluntary conservation.

2. Without electricity shortages, power rates wouldn’t have soared, leading to the price freeze.

If Ontario had had plentiful supplies of power to draw on last fall, prices wouldn’t have soared. But Eves found himself with scant power supplies to call on because his nuclear plants weren’t working as planned – they rarely have. Eves was able to import some cheaper power from the United States – after deregulation south of the border, supplies there soared while prices plummeted – but not enough to make a big difference in Ontario. He and his predecessor, Mike Harris, had dithered in beefing up the needed interconnection with the U.S. grid, preventing plentiful supplies of U.S. power from coming to his rescue.

3. Had Eves not killed deregulation, generating plants would have been abundant, power would have been abundant, power prices would have behaved and Eves wouldn’t have needed his price freeze.

Mostly, Eves has had too few generating plants because the private sector abandoned Ontario. Just four years ago, while Eves was minister of finance, Ontario was teeming with independent private power entrepreneurs with plans for dozens of new, high-efficiency power plants. These plants – the same kind that led to a glut of power south of the border – can be built in as little as 12 to 18 months. Their construction awaited only the long-promised deregulation of the power sector. Yet Harris repeatedly gutted deregulation and then Eves effectively killed it. The independent power producers closed their offices and left Ontario. And Ontario was left without the entrepreneurs capable of quickly bringing reliable power to market.

4. Nuclear power, coupled with the expense of the rate freeze, will soon spur conservation.

Without private sector producers, Eves has fallen back on nuclear power, the technology of choice for many government-run monopolies. He is now spending billions in uneconomical repairs at the breakdown-prone Pickering A nuclear station. When or if that station will produce power again is unknown; that its power will be expensive, raising costs for all Ontarians, is not.

When Eves will rescind his rate freeze is also unknown, but it, too, is adding unnecessary costs to the power system. To date, those costs – about $800-million per year – are being hidden from view, in a new Crown corporation that Eves created to eliminate the legacy of the old Ontario Hydro’s public debt. When the nuclear and rate-freeze costs finally land on power customers, rates will soar and consumers will conserve.

In the end, Ontario didn’t privatize its power system and it didn’t deregulate prices. Instead, it created a chaotic make-up-the-rules-as-you-go government system far worse than any that Ontario had ever before seen.

All this Mr. Eves did in aid of remaining Premier. How well he succeeds in his re-election strategy will now depend on how well Ontarians connect the dots.

Lawrence Solomon is executive director of Urban Renaissance Institute, a division of Energy Probe Research Foundation. http://www.Urban-Renaissance.com, E-mail: LawrenceSolomon@nextcity.com.

Posted in Energy, Utilities_Electric | Leave a comment

Automobile insurance reforms focus on cost reductions and fairness to consumers

Government of Newfoundland and Labrador: Insurance and Pensions Division

August 26/2003

Automobile insurance reforms focus on cost reductions and fairness to consumers.

BACKGROUNDER
AUTOMOBILE INSURANCE REFORM
PUTTING CONSUMERS FIRST

In Newfoundland and Labrador, all drivers are required by law to carry public liability insurance for protection in the case of an automobile accident.

Government has researched and studied rising insurance rates for many years. A Select Committee of the House of Assembly reported on this industry in March 1998. Since that time, extensive consultations and analysis have taken place.

In December 2002, government introduced a bill which addressed the fair treatment of consumers. The time has come to reduce insurance rates that have escalated to the point where some people cannot afford to drive. Our goal is to provide an accessible and affordable insurance system that is fair to all consumers. This bill has now been strengthened to legislate a reduction in the cost of public liability insurance.

Every driver has the same basic insurance policy because it is mandatory. Many drivers carry extra liability, accident benefits, collision and comprehensive coverage and choose their deductibles. We will take coverage for pain and suffering that is not permanent and serious out of mandatory insurance and add it as a new optional coverage. By law, consumers will retain the right to carry this coverage at current prices for the next 12 months.

Newfoundland and Labrador has put consumers first. Our reform package is one of the most comprehensive in the history of Canada

What Reform Will Mean for Consumers

Affordability

– 30 per cent savings on mandatory public liability for all drivers.

– 60 per cent approximate savings for many young drivers, seniors and others.

Accessibility

– Companies cannot refuse to insure you for reasons such as not-at-fault claims, lapse in coverage, NSF cheques or other factors not related to driving record.

Fairness

– Companies cannot use age, gender, marital status or any factor not related to driving record to determine the cost of your insurance.

Choice

– You will automatically receive mandatory coverage at 30 per cent less, or choose to keep your present coverage (which includes pain and suffering) at your current price.

Basic Public Liability Coverage

Examples

Before 

Four drivers purchase basic mandatory liability insurance for the same type of vehicle. Although these drivers have been driving for five years without an accident, they pay different rates.

New System 

These four drivers would now pay the same rate because the new reform package will treat all drivers fairly.

Public Liability Insurance

 

 

 

 

 

 

 

 

Twelve Month Freeze on Insurance Rates

Government will freeze automobile insurance rates for a period of one year. Beyond the 12 month period, insurance companies must prove their case before the PUB in order for rates to go up.

Other Reforms

Ability to Pay Insurance Monthly 

Allows you to budget your money over time; protects you from loss of money if your insurance company goes bankrupt.

Exclude People from Your Insurance Policy

Allows owner to exclude individuals from using their vehicle, thereby reducing the cost of your insurance.

Requirements to Provide Information to Consumers

Ensures insurance companies and brokers make information available so you are well informed.

Flexible Methods of Compensation for Injury 

Allows you to request that your settlement be paid over a period of time versus one up-front lump sum.

Improved Claims Practices 

Ensures your claims are settled quickly and fairly.

Removal of Minimum Insurance Rates Set by PUB

Enhances competition in the insurance industry.

Protection from Losing Money Paid for Insurance

Ensures consumers will not lose money if their insurance company goes bankrupt.

Increased Penalties for Uninsured Drivers 

Intended to reduce the number of uninsured drivers on our roads.

Contact Information

For more information on this program, please contact:
Insurance and Pensions Division
Department of Government Services and Lands

P. O. Box 8700
St. John’s, NL A1B 4J6
Telephone: (709) 729-4834
Facsimile: (709) 729-3205

or visit our website at www.gov.nl.ca/gsl

Ability to Pay Insurance Monthly

– You will automatically receive mandatory coverage at 30 per cent less, or choose to keep your present coverage (which includes pain and suffering) at your current price.

– Companies cannot use age, gender, marital status or any factor not related to driving record to determine the cost of your insurance.

Posted in Automobile | Leave a comment

Power to consumers, not monopolies

Lawrence Solomon
National Post
August 21, 2003

Fifty million North Americans suffered inconvenience and expense in the Great Blackout of 2003. Not one will receive any compensation.

Millions of companies also suffered inconvenience and expense, and lost business that they will never make up. Amid the ruins, however, lie a lucky handful of companies who will have their losses covered. The lucky are among the electricity monopolies that brought us the Great Blackout of 2003.

Under the system of regulation that dominates North America’s electricity monopolies, customers and taxpayers are almost always at risk, and power companies are almost always saved harmless. The imbalance is even more extreme in central Canada, where deregulation was stopped, where no privatizations have occurred, and where the old monopolies remain largely intact and as unaccountable as ever. To add insult to the injury that Ontarians have just suffered, rates will soon go up, or taxes will increase, to compensate the power companies for their lost business, and the ordeal that they’ve gone through.

In a normal industry, subject to the discipline of a competitive market, heads would roll after a fiasco of such epic proportions. Don’t expect anyone to lose his job at Hydro One – a company that shares responsibility for maintaining reliability on Ontario’s grid. It treats the grid’s failure as someone else’s problem, and happily stands by as politicians on both sides of the border discuss the intricacies of how best to run the electricity business. It also gets grim satisfaction as Ontario Premier Ernie Eves places most blame on distant jurisdictions. (The only ones in Ontario subject to an Eves tongue-lashing are members of the general public. If more blackouts come, he has told Ontarians, it will be because Ontarians aren’t conserving enough.)

A regulatory system that gives a pass to those who cause the damage, and a finger to those who suffer, is worse than no regulatory system at all.

A business whose performance depends on customers conserving – i.e., avoiding – its product is an aberration. Yet in the upside-down world of electricity monopolies, these are accepted as normal, as are the inevitable consequences – frequent minor power failures and infrequent massive ones.

Power customers need strong and independent regulation, a practical impossibility in Ontario where the government effectively owns both the industry and the regulator. Government regulators can be effective – in Ontario, regulators such as the Ontario Energy Board have had a history of being superbly effective – but only when they haven’t been asked to regulate their own masters. I know of no government regulator anywhere in the world that has ever been an effective regulator of a government-owned industry.

To see what independent electricity regulators can do, we need look at the United Kingdom, the only country to privatize and break up a major power monopoly into its many component businesses and then regulate those components – such as the distribution of electricity – that did not lend themselves to competition.

In the U.K., customers are no longer powerless. If the distribution company doesn’t perform, the customer’s inconvenience is the utility shareholder’s pain. You are a residential customer in London with a problem, and you ask the company to make a service call. It doesn’t come at the agreed upon time. You receive £20 in compensation. Or you are a small business and request a quote for upgraded service. The quote arrives late. You receive £40. Or you and your business suffer an extended power interruption, of the duration Ontario and the United States just experienced. You receive £75 and your business £125, or roughly $440 to ease your discomfort.

Except that the company almost never needs to make payments – and has never needed to compensate large numbers of people – because it has invested what was necessary to deliver the service it guarantees its customers. The London utility meets 99.9% of its targets for unexpected interruptions and it meets virtually 100% of its targets in replying to customers or correcting routine service problems. The standards of service that it must meet, meanwhile, get steadily ratcheted tighter with each passing year.

Since the U.K. power system was privatized and regulated, the time that customers have been without power has dropped by almost two-thirds, thanks to more than £30-billion invested in the U.K. grid. Neither are the British exhorted to conserve to forestall a grid collapse: The U.K. is awash in electricity following an unprecedented building boom in clean power plants. Neither did customers’ or taxpayers’ pocketbooks suffer as the privatized power companies upgraded their capabilities: Rates have dropped markedly, for residential and business customers alike.

Fifty-million-odd people in the U.K. now enjoy power from the world’s most modern, most reliable, most efficient, least monopolized and least politicized electricity sector in the world. Fifty-million-odd North Americans, meanwhile, are now recovering from everything that the U.K. system is not.

Lawrence Solomon is executive director of Urban Renaissance Institute, a division of Energy Probe Research Foundation. LawrenceSolomon@nextcity.com.

Related articles:
Holding power companies to account and compensating consumers

Readers respond

Re: Power To Consumers, Not Monopolies, Lawrence Solomon, Aug. 21.
Thank goodness for Mr. Solomon’s forthright and accurate description of the pitiful behaviour of Ontario’s power generating system, and the politicians who oversee it. One does not need to be an expert to understand that Ontario Hydro’s main objective became doing what is in the best interest of its unionized employees and the state’s bureaucratic elite a long time ago.

Ontario’s management of its nuclear generating facilities has been nothing short of criminal, given the phenomenal amounts of taxpayers’ money that has been poured into these old plants.

But if you listen to people like Ernie Eves and Mel Lastman, it is we the consumers who are the problem. We “waste” power, and if we don’t stop our selfish ways, we are going to cause rolling blackouts. This absolute nonsense has been echoed by countless environmentalist extremists who get daily airtime on the CBC and other outlets.

I’ve even heard people on some of the major radio stations say that we should stop using household appliances altogether, and turn back the clock 50 years or so. This is nothing short of deliberate deception, an attempt to conceal the colossal failures found in the Hydro state monopoly. This power shortage is 100% their fault, pure and simple.

Howard Hampton, who leads Ontario’s NDP, made the ridiculous statement that this nightmare proves that Hydro is “too important” to be put in the hands of the private sector that he hates so much. Let’s hope he does not feel that way about our food supply.

Frank Gray, Unionville, Ont.

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Holding power companies to account and compensating consumers

Lawrence Solomon
National Post
August 16, 2003

The food in your freezer has spoiled. The clocks in your home need to be reset. Your schedule has been thrown out the window.

Shouldn’t someone – apart from you – have to pay for the disruption that power shortages cause in your life? Wouldn’t power companies smarten up if they were actually held to account for the disruptions they foist on customers and if they didn’t operate in a 100%-monopoly system, in which their customers aren’t free to take their business elsewhere if they choose?

In the United Kingdom, power companies are held to account in just these ways. Customers are free to choose among many suppliers. They are compensated for their inconvenience. And a revolution in reliability has occurred.

When the United Kingdom privatized its power system in 1990, it injected accountability into what had been a decrepit state-owned monopoly system. The number of power cuts per 100 customers has declined precipitously, by a whopping 31%. The average duration of those power cuts has also fallen, by 64%. Customers have not only been spared from cost and inconvenience from disruptions that did not occur, they have received millions of pounds in compensation for the fewer disruptions that did.

Ontario’s government-owned monopoly system of today resembles the cumbersome U.K. utility that existed prior to privatization. The Ontario monopoly mostly produces unreliable electricity from outdated and failing coal and nuclear plants. And it has starved the power grid network of needed investments in order to prop up its money-losing nuclear plants, making the delivery of power unreliable as well.

When the weather behaves, and its luck holds out, power gets to customers. In the past few years, the system has become so unstable due to lack of investment in both generating stations and in the grid, that Ontario’s power authorities have resorted to pleading with customers to cut back or face brownouts and blackouts. This week, the lack of investment caught up with Ontario and cost Ontarians big-time.

Once, the U.K., too, suffered from lack of investment. Then, after privatization, when the one big cumbersome monopoly was broken up into about 20 nimble companies, competition soon transformed the industry. The polluting coal and nuclear plants were rapidly replaced by a new generation of high-efficiency natural gas-fired systems. And more than £30-billion was invested in the transmission systems to make sure the clean power could get to customers. Despite the mammoth private-sector investments, costs plummeted, benefitting residential and industrial customers alike. It was the most rapid transformation of a power system in the history of the world and it occurred almost invisibly, without any California-style power fiascos. Because it was also the first major privatization, it occurred without benefit of any precedents to guide the way.

In reforming its power system, the U.K. recognized that the electricity system is a hybrid: The generating plants are naturally competitive and can operate on a free-market basis with relatively little regulation; the transmission lines, in contrast, are naturally monopolistic and require a good deal of regulation to keep them honest. Intelligent regulation – much of it oriented to improving customer service – became a hallmark of the U.K. reforms.

Under the U.K. system, electricity suppliers must guarantee their customers standards in 11 different areas – everything from responding to customer telephone calls on a timely basis to keeping appointments to restoring power after disruptions. In their first year under the regulator’s gun, power companies made 13,000 payments to consumers in compensation for poor service. That number dropped to a mere 2,251 within five years. The customers don’t get rich from the compensation – some infractions fetch only a few pounds and a seriously affected customer can usually claim only £50 from a major interruption (18 hours without power). But the compensation is enough to keep companies on their toes and striving to develop ever-more reliable systems.

The U.K. regulatory system continually tightens its expectations of companies. It sets targets for different companies to meet and, as companies get better, the regulator sets the standards tighter. But the system also adjusts with feedback from customers as to their preferences. In the past, a standard for interruption of service has been one minute without power, a hardship that most residential customers found trivial. Even a three-minute interruption to a residential customer, the regulator discovered, costs the typical domestic customer only four pence. A three-hour interruption, in contrast, costs the typical customer £4 – with interruptions of this scale, meal arrangements may need to be changed. Customers also reported they were particularly perturbed by repeated interruptions, even if each is relatively short, leading the U.K. regulators to develop compensation schemes of £50 for customers who experience more than three interruptions of three minutes or more in a year.

Is a three-minute interruption an appropriate standard? Should companies be allowed to keep customers dangling on the telephone line for more than 15 seconds? These are the controversies that now beset the United Kingdom’s privatized power system.

Were we only so lucky.

Lawrence Solomon is executive director of Urban Renaissance Institute, a division of Energy Probe Research Foundation.; LawrenceSolomon@nextcity.com

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