What Are We Doing?
Opposing the hostile take-over of Liberty Apple Valley
Poor anti-monopolist Pat Orr. In the Apple Valley Review, he wrote,
What mucks up this whole local water conversation is that this utility that we all need to survive is not an open market private businesses. Like Edison, Southwest Gas, Verizon and others, it [Apple Valley Ranchos Water Company] is a monolithic monopoly that government has allowed to evolve free of any real competitive pressure … (
For a self-described political junkie, Pat Orr seems to have a pretty shaky grasp not only of what constitutes a monopoly, but also of the strictures under which Apple Valley Ranchos is allowed to operate.
First, there is no such thing as a private monopoly, except in the case where a company is the only one that has any interest in providing a given product or service, and these are only virtual monopolies because anyone else could enter the market if they wished (think left-handed pencils, etc.). Clearly, this is not the case with our water utility.
Second, true monopolies can only exist with the help of government protection. Otherwise, anyone else could enter the market — and there goes your monopoly.
Third, an actual monopoly would not need to get permission for virtually everything it does, as Ranchos must get permission from the California Public Utilities Commission (CPUC) just about every time it turns around.
In the case of water utilities, electrical utilities, sewer utilities, and (formerly) cable and telephone utilities, the investments in infrastructure needed to provide the service (and the blight that would come from having multiple competing services) make an argument for authorized service areas, which is not the same as a monopoly. These authorized service areas don’t simply pop into existence and then run things to suit themselves, as Orr would have you believe. Rather, they are created in partnership between the utility and government at many levels (including the Town of Apple Valley, which collects hundreds of thousands in franchise fees annual from Ranchos).
As for competitive pressure, Orr was a member of the Blue Ribbon Water Committee, so at one time he was (or should have been) well aware of the intensive scrutiny under which Ranchos operates, both from the CPUC and the Office of Ratepayer Advocates. For that matter, Governor Brown’s recent conservation mandate shows that Ranchos’ operations are subject to far-ranging oversight.
If the Town of Apple Valley is successful in its hostile takeover of Ranchos, Orr will get to see a true monopoly in action. Not only is the Town Council the only game in town for government (by law), but it will have monopoly control over water delivery, water prices, and water service in general.
By that time, though, the time to fight the
monolithic monopoly will be done and dusted, and whatever opposition Orr has to monopolies will be for naught.
— Greg Raven is Co-Chair of Apple Valley Citizens for Government Accountability, and is concerned about quality of life issues.