monopoly

Mike has covered this as well. Turns out Nashville Gas customers in Metro-Nashville pay a fee that people in the ‘burbs don’t. Mike offers the “city residents subsidizing suburban sprawl yet again” angle. Here are the angles that fuel my irritation:

  • Small picture: The fee dates back to a an agreement that the Nashville Gas & Heating Co. should pay the city (and now Metro) government 5% of gross revenue. In fine form of any company charged a “fee” by the government, they passed it on to the customers, making it a non-issue for the company, but instead a cost borne by the customers. Those of you that have ever taken the time to peruse your multi-page phone bill are probably familiar with this phenomenon.
  • Bigger picture: a monopoly power granted to Nashville Gas by the state is being used to collect a fee — higher even than 5% — to subsidize infrastructure improvements in high-growth (and high-revenue) areas, by pricing predatorily on existing customers, who of course have nowhere to go. Sounds familiar, doesn’t it?
  • This is essentially a tax, since the money goes from citizens via a monopoly to the government. What kind of tax is one that weighs heaviest on citizens who pay a disproportionate amount of their income on essentials like heat because they are poor? That’s right, a regressive tax.

Welcome to the wonderful world of the “free market”, brought to you by utility deregulation. Metro Finance Director David Manning says that they’re fine with the fee: “We did not want to see them lower it, no,” Manning said. “We would have to raise the revenue somewhere else.”

Tough. Find it elsewhere.

5 Comments so far

  1. Katherine Coble (unregistered) on March 25th, 2006 @ 3:48 pm

    My favourite part is where they admit that this is even better than a tax because more people have to pay it.

    I want my money back. I chose to live in a gas-efficient house in Davidson Co. I don’t want to underwrite the heat in a McMansion.


  2. Alan (unregistered) on March 25th, 2006 @ 7:09 pm

    whoa….that monopoly power was not “granted by the state”. Remember that it wasn’t two years ago we had a referendum on whether the city should shop around for another gas provider…and for some ungodly reason, the voters rejected it and Nashville Gas is here to stay for another 30 years. I will never understand why. I have always wondered how many voters even understood that “Nashville Gas” is not based in Nashville.

    The voters actually bear more blame…hell, Nashville Gas has a mandate!


  3. Chris Wage (unregistered) on March 25th, 2006 @ 7:22 pm

    The monopoly power was granted by the state, whether or not the people voted for it.

    But yes, your point stands that the voter outcome in this case is a bit mystifying. If Larry Woods was a lesser man he’d probably be running around saying “I told you so” right about now.


  4. brittney (unregistered) on March 25th, 2006 @ 10:49 pm

    This makes me sick.


  5. Jim (unregistered) on March 29th, 2006 @ 3:34 pm

    The typical voter didn’t educate themselves on that issue. And the tendency of people is to fear change. I think that’s why that referendum died.

    Explain to me why everyone voted against state income tax even though it would benefit the vast majority of the working poor and the middle class. Instead we have the worst sales and property taxes in the nation and services we receive keep getting cut. But, hey, at least Phil Valentine and Steve Gill can keep driving their luxury vehicles! Sheeple…



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