I am no expert on Maine’s energy economics, but I can’t accept at face value official reassurances about the state’s access to electric power. I don’t expect rolling blackouts. Nonetheless, I am skeptical that the deregulated energy market on which Maine increasingly relies will deliver power in an inexpensive or environmentally sustainable manner.

Deregulation supporters argue that California’s problems spring from an insufficient dose of deregulation. The wholesale market was deregulated, but retail electricity prices were frozen and environmental limits placed on new plant construction. If deregulation had been complete, supply would have increased to meet levels of demand chastened by realistic prices.

One can pick many holes in this argument. Retail energy prices were set four years ago at the demand not of left economists but the politically powerful utility industry itself. Price floors were set above then current market prices and represented a subsidy to the industry to help pay off its “stranded” nuclear power plants, themselves the product of immense government subsidy.

Even when one puts aside the retrospective blame games, the case for deregulation everywhere hinges on at least one questionable assumption. If the supplier market, the companies producing large amounts of electricity for sale on the grid, is not genuinely competitive, industry profits will be inordinately high and so will retail prices. Though I doubt the electricity supplier market is a domestic OPEC, there are reasons for concern.

For at least the near term, most of us will get electricity from the utility lines connecting our homes to relatively distant generating plants. These generation systems are extremely capital intensive and even without environmental regulation necessarily involve significant risks. In economic terms, barriers to entry of this industry are high. Electric generation is not like starting a dot com or opening a sandwich shop. A few large suppliers already play a major role on the “grid” and consolidation is proceeding apace. The industry is following a pattern reminiscent of another capital-intensive industry, the airlines. Records from the Federal Energy Regulatory Commission indicate that the commission has approved 47 of 54 merger applications since 1995. As one economist puts it, “No one ever discusses the fact that the electricity cartel is reconstituting itself in a way bolder than it was in the 1920s.”

Competition such as it is among such behemoths isn’t likely to benefit most of us. I am inclined to agree with Bangor Hydro President Robert Briggs (BDN, Feb. 5) that in the long run Maine would benefit far more from a public power authority, a state run authority that might both retain some generating capacity of its own and seek bids from outside producers.

Though legislative leaders have suggested that future hearings on Maine electricity will probably concentrate on fine tuning deregulation, I hope they consider some fundamental issues. Public power has a long and little noted history in this country. Though not always environmentally benign, public power authorities have consistently kept prices below the level charged by private utilities.

Former CMP president David Flanagan worries that public interference in power decisions translates into politically imposed inefficiencies. He apparently alludes to the long-term contracts with alternative suppliers entered into during earlier energy crises, contracts that ended up significantly burdening companies and ratepayers. Hindsight is of course always 20/20, and private utilities have also made immense miscalculations.

In the context of a public authority, it is also worth mentioning that the only utility systems in California not suffering are the public ones. Both in Sacramento and Los Angeles, power has remained both available and affordable. One reason is that these authorities have poured profits back into their systems.

Conservation and renewables are the best future sources of power. Sacramento has a program that encourages homeowners to pay a monthly fee for the utility to install solar panels at their homes. District residents can buy photovoltaic packages at subsidized rates, and all participants get an energy audit to identify ways to reduce energy use.

Photovoltaics won’t solve our immediate problems, but Maine still has a long way to go to meet basic energy conservation standards. Its best shot of achieving sustainable and affordable energy is to avoid the easy dogmatisms of the deregulators.

Markets can do many things well, but I am not convinced that wholesale energy production is one of them. Markets would have their best shot here if some of the profits from conventional electricity generation could be recycled into energy audits and low interest loan funds. Such funds could encourage homeowners to seek the best and most cost effective means to control their own energy costs, a task the state should encourage but not manage.

John Buell is a political economist who lives in Southwest Harbor. His email address is jbuell@acadia.net.