Manzullo: Subsidiaries of Public Utilities Reap Unfair Advantage Over Small Business Competitors
Manzullo: Subsidiaries of Public Utilities Reap Unfair Advantage Over Small Business Competitors
Wednesday, May 04, 2005
(WASHINGTON) House Small Business Committee Chairman Don Manzullo (R-IL) today said the unregulated affiliates of America's public utility companies enjoy an unfair advantage when they compete with small businesses in their respective industries.
Manzullo, who chaired a full committee hearing on the issue this afternoon, said the public utilities are increasingly creating affiliate companies that provide other kinds of services apart from the basic power supply delivery. Companies owned and operated by these utilities sell plumbing and electrical services, home remodeling, vinyl siding and storm windows, subscription service contracts, appliance sales and rentals and many other services that range from home security systems to high-speed Internet access.
Witnesses at today's hearing spoke of large public utilities starting up unrelated side businesses that they subsidized with guaranteed profits gained from utility rate hikes. In addition, the utility companies often used their utility employees and equipment to perform the work of the unregulated affiliate, witnesses said.
"These unregulated subsidiaries enjoy unique advantages over their small business competitors because of their special status as instruments of a public utility," Manzullo said. "Their parent companies pass down their highly visible brand names along with subsidies paid for by guaranteed profits. In addition, start-up capital is much easier to obtain for these affiliates."
Manzullo said he will work with his colleagues to address the problem as Congress proceeds toward enactment of a national energy policy.
Today's hearing marked the latest in a series of hearings Manzullo has held exploring the problems of publicly subsidized companies gaining an unfair advantage over their small business competitors. The committee previously explored unfair advantages enjoyed by Federal Prison Industries, the Veterans Administration, and the Government Printing Office over their small business competitors.
"Our small employers are not asking for special consideration. They just want to be able to compete on a level playing field," Manzullo said.
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