I
PIRGIM REPORTS
Eighty-four years of editorial freedom
edited and managed by students at the University of Michigan
Plan seeks
to cut electricity use
1
i
Friday, February 22, 1974
News Phone: 7
64-0552
420 Maynard St., Ann Arbor, Mi. 48104
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Robber baron for VP
THE FOOLS on the Hill in Washing- he can run the country in the open
ton, D. C. are currently probing for a change.
Sir Nelson Rockefeller's background " Among the marvelous acts of phi-
for something fishy. Congressional lanthropy credited to Nelson Rocke-
noses are among the least sensitive feller are the following:
in the world, though, and Rockefeller -$86,000 to L. Judson Morhouse, a
will probably be confirmed in early Republican official in New York who
December, just in time to catch the sold liquor licenses at $50,000 each un-
addicting American Christmas spirit. til he was caught and convicted of
As John D. Rockefeller II always told bribery. Nelson also commuted his
his son Nelson: "Christmas is at the prison sentence.
end of the fourth quarter". -$50,000 to Henry Kissinger a few
days before he joined the Nixon ad-
Rockefeller has given away so much mnsrto-
money that when he travels to Wash- ministration.
nonytht enver is aetWanhc The most well-known scandal dis-
ington to deliver his acceptance closed by the congressional investiga-
speech (the same one he's had around tion of Rockefeller is the financing
since 1964), people are going to say, of the nasty Arthur Goldberg biog-
"Santa Claus is coming to town." raphy. Goldberg challenged Rocky for
Although nothing may smell fishy the governorship of New York in 1970.
in the Congressional chambers, where The book was authored by Victor
our most prominent aristocrat is be- Lasky and paid for by Nelson's gen-
ing questioned, the place reeks of erous brother Laurance. Rockefeller
octopus. The Rockefeller family over- at first denied knowledge of the
sees a fiscal empire that is responsible book's origins, but later, in an apolo-
for political and economic oppression getic telegram to Goldberg, admitted
unparalleled in modern times. They that he knew of the book before it
have their profit-thirsty tentacles in was released.
the cookie jars of uncountable Ameri-
can and foreign industries. Robber IN OTHER WORDS, our next vice
barons never fade away, they just president intentionally lied to
gain respectability. cover up his involvement in the af-
fair.
AMERICANS, in addition to serving The $50,000 gift to Kissinger be-
as the cops of the world, have also comes interesting in the light of last
been the pirates of the world, bleed- year's CIA-financed fascist coup in
ing the underdeveloped nations of Chile. The democratically elected
their natural resources. The Rocke- Marxist government began national-
fellers have been right there all the izing industries in 1970. They made
time, pillaging along with their "com- the mistake of taking over mines con-
petitors." Draft resistance organizer trolled by the Rockefeller-dominated
David Harris once said, "If you rob a C h a s e Manhattan Bank. Kis-
gas station, they throw you in jail singer authorized the destabilization
for 10 years. If you steal all the oil of Allende's government soon after-
in Venezuela, they make you governor wards. The fascists, of course, now
of New York." want to return many properties to
In 1969, Nixon sent Rockefeller on their exploiters.
a fact-finding tour of Latin Ameri- The man who gave "shoot the kill"
ca. Do you know what "facts" he orders to the National Guard before
found? Venezuela, Peru, and Chile they shot and killed four Kent State
refused to host Rockefeller. The press students has recently been popularly
in Brazil was forbidden to publish elected governqr of Ohio. The lieuten-
critical remarks. There were fire- ant convicted of the brutal massacre
bombings in Ecuador and riots in Bo- of 22 My Lai citizens is now a free
livia, Columbia, and Honduras. A man after serving two and a half
General Motors factory was burned years in a penthouse prison.
down In Uruguay. In Argentina, nine THE MAN RESPONSIBLE for the
supermarkets controlled by the Roc- slaughter of 37 inmates at Attica
kefellers wer trashed. The greatest prison is about to be confirmed as
tragedy occurred in the Dominican vice president. To what depths of de-
Republic, where four people died in pravity must a man stoop to gain
street shootings. popularity in America?
Far from being the best candidate
for the vice presidency, Nelson Rocke-
THIS SAME MAN will soon be our feller is absolutely the worst. His con-
vice president, from which post firmation will be one more blatant
display of America's corruption and
immorality.
4 -VINCENT BADIA
IM Iic~igal D*il TODAY'S STAFF:
News: Dan Biddle, Cheryl Pilate, Jeff
Sports Staff Ristine, Judy Ruskin, Steve Selbst,
Thom Simonian, Jim Tobin
MARC FELDMAN
Sports Editor EditorialBPage: Tony Duenas, Steve
GEORGE HASTINGS Ross, Becky Warner, David Warren
Executive Sports Editor Arts Page: David Blomquist
ROGE ROSSITER .... Managing Sports Editor
JOHN KAHLER......... Associate Sports Editor Photo Technician: Ken Fink
*p
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By RICHARD CONLIN
THERE IS general agreement that we
are facing an electric utility crisis
in Michigan. However, many people look
merely at the short-term crisis and ig-
nore the long-term problems.
If we are to avoid a continual series
of crises in the future, we need a
comprehensive plan for restructuring
our electric utility system. The Public
Research Group in Michigan (PIRGIM)
has been working on one major part
of such a plan.
Six problems must be dealt with: rap-
idly rising electric demand, now doub-
ling every ten years; rising construc-
tion costs for new production facilities,
which makes electricity from new plants
cost more than electricity from present
units; high interest on construction capi-
tal, which has severely hurt the utilities'
ability to expand and forced rates up-
wards; long-range limitation on energy
resources, which necessitate a conser-
vation strategy; environmental and
health hazards of power generation, in-
cluding the extreme dangers of nuclear
power; and the unbearable cost burden
on poor and middle-income consumers
due to rising rates, caused primarily by
excesive electric use by the rich.
MANY PARTIAL solutions have been
tried. Consumers have opposed rate in-
creases. Environmentalists have opposed
additional plant construction. Utilities
have sought additional capital.
But what we need is not partial solu-
tions. We need a total package, a stra-
tegy which will create solutions to all
of these problems.
PIRGIM has offered the state's regula-
tory agency, the Public Service Com-
mission, a concept which the group
claims is a major step towards such a
strategy: the "Lifeline" rate structure
for residential electric consumers.
"Lifeline" is a graduated rate sys-
tem, with rising unit prices for increas-
ing amounts of electricity use.
lI O:V
By ALAN RESNICK
A TRIP TO to grocery store I e t s
any consumer know just how little
today's dollar will buy. Compared to
prices of just two years ago, current day
pricetags for food, automobiles, and ap-
pliances place an almost unbearable
strain on the budgets of the American
people.
While the overall Consumer Price In-
dex has jumped sharply over the past
few years, the medical care component
of the index has increased at an even
faster rate. In the past five years alone,
physicians fees have increased almost
40 per cent, while hospital charges are
approaching a level almost double those
of 1969.
The cold facts are that last year
alone, $120 billion was spent on health
care, over twice the annual figure when
former President Nixon took office.
While the thought may not be pleas-
ant, we must face the fact that the
United States is in the midst of a health
care crisis. On a more optimistic note,
however, a possible solution lies on the
horizon, that of the Health Mainten-
ance Organization (HMO).
THE HMO is a medical plan in which
a group of physicians provides b o t h
outpatient and hospital care for mem-
bers who join the plan at a fixed prepaid
fee. An HMO presently being organ-
ized in the Ann Arbor area, will begin
operation within the next few years.
Before discusing the Ann Arbor HMO
in particular, the concept of the HMO
should be examined further. The U.S.
health industry is characterized by
small and fragmented delivery units,
non-competitive pricing, and inefficient
incentives for both buyers and sellers of
health services.
The HMO, on the other hand, is an
For example, the first 400 kilowatt
hours of electricity per month might be
priced at 2.4 cents per kilowatt hour,
the nexta 400 at 3.2 cents and additional
units at 3.6 cents.
RESIDENTIAL USAGE has expanded
faster than any other electric use. Much
of this growth has powered the luxuries
of the well-to-do - central air condition-
ing, the fourth TV set, outdoor lighting,
microwave ovens, and the like.
The expansion was encouraged by elec-
tric rates, which gave discounts to larg-
er users in the belief that increased us-
age lowered total costs. Because new
generating units are now more expen-
sive than older ones, such economies
excessive use causes the costs to rise,
and not on the poorl and on stable users
of electricity, who are suffering unfair-
ly from the present rate increases.
All objective evidence shows that the
poor are lower users of electricity. The
proposal attempts to allocate costs where
they belong.
Furthermore, "Lifeline" will provide
an economic incentive to conserve elec-
tricity. By using the classic control me-
chanism of higher prices, it will deter
people from excessive electric use, thus
helping to slow down runaway demand
growth.
As demand growth decreases, the util-
ities will benefit, since they will no long-
er require the. vast amounts of expan-
'Residential usage has expanded faster than other elec-
tric use. Much of this growth has powered the luxeries of
the well-to-do-central air conditioning, the fourth TV
set, outdoor lighting, microwave ovens and the like. The
expansion was encouraged by electric rates, which gave
discounts to larger users in the belief that increased usage
lowered total costs. Because new generating units are now
more expensive than old ones, such economies of scale
no longer exist.'
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users of electric heat - it would be un-
i -ir to penalize these people, since home
heating is a necesity of life. However,
,: electric heat installations, except
i7 -casual cases of necessity, would be
subject to the higher rates, because
electric heat is a very inefficient way
of using energy.
If "Lifeline" were adopted, Consum-
ers Power would get all of its required
revenue, but the cost burden would be
on those who could afford it.
Some 75 per cent of Consumers Power
electric users would have lower rates
under "Lifeline" than under the Con-
sumers Power proposal, while the aver-
age user (457 kilowatt hours per month)
would actually pay a few pennies less
per month than at present.
IF THE PLAN succeeded in lowering
consumption increase, it would solve
many of our utility problems. Ironically,
if it did not succeed, its higher rates for
large users would provide the company
with adequate revenue to finance ne-
cessary expansion.
Ultimately, everyone would benefit from
this lowering of our excessive growth
in energy use, because there would be
adequate energy to go around without
enormous price increases, without such
rapid exhausting of fuel reserves, and
without so much pollution caused by
power plants. Of course, this would help
our employment problem as industry
would also benefit.
Michigan has a chance to be a leader
in using energy wisely. The adoption of
the "Lifeline" rate structure is a neces-
sity for a rational energy policy and for
our economic health.
Richard Conlin is a member of
the PIRGIM staff who will speak at
the University Monday on the ener-
gy issue. Conlin ran for county
commissioner in Lansing during
this month's elections.
of scale no longer exist. Today, increas-
ing demand .that requires construction
of expensive new plants raises every-
one's rates.
Partially in recognition of this new
economic fact of life, the Public Serv-
ice Commission recently required Mich-
igan's utilities to shift from downward-
ly graduated "incentive" rates to flat
rates. PIRGIM is now proposing going
a step further, adopting upwardly grad-
uated "disincentive" rates, which PIR-
GIM cats "Lifeline" rates.
THE "LIFELINE" schedule will place
the burden of rising costs on those whose
sion capital which are such a problem
now. While we deal with this economic
problem, we will at the same time be
dealing with the related problems of en-
ergy conservation and environmental
pollution.
PIRGIM is proposing two exceptions
to deal with some special problems.
First, because many extremely low elec-
tric users are second homes and vaca-
tio i cottages, the plan retains a month-
ly service charge which would prevent
their owners from reaping benefits de-
s' -ed for regular customers.
Second, the proposal exempts present
'fable
lheualth
alternative?
organized system of health care that
promises to provide high quality phy-
sician services, emergency and preven-
tive treatment, and hospital services to
those who have paid a fixed sum of
money in advance.
UNTIL RECENTLY, no one thought of
health care as an industry, and it was
only the profane who used terms such
as health delivery system, resource al-
location, and cost effectiveness.
In the last few years, however, econ-
omists like the University's Paul Feld-
stein have pioneered the concept of us-
ing economics as a means of health care
analysis.
The HMO may revolutionize health
care for several reasons. First, it agrees
to provide both physician and hospital
services to its members in exchange for
a fixed annual fee and thereby shares
the financial risk of ill health with the
consumer.
Rather than paying a doctor on a fee-
for-service basis( the subscriber incurs
no additional costs once he or she pre-
pays the HMO fee, regardless of extent
or seriousness of illnesses treated.
Current estimates for the local HMO
put the monthly charge at $22 for an
individual and approximately $60 for a
family of any size.
BECAUSE A lengthy hospital s t a y
would not cost a subscriber any more
than his prepaid fee, a sick person is
a financial liability to the HMO. As a
result the HMO attempts to discourage
hospital stays by practicing preventive
medicine. From an economic viewpoint
this would appear to be far more efficient
than current health care packages which
provide benefits only when employes are
of the job or in the hospital. By not
stressing preventive medicine, conven-
tional insurance programs tend to pro-
mote loss of work hours.
More important than the economic fac-
tor is the fact that unneeded hospitali-
zation does not occur as frequently under
the HMO system.
Unnecessary operations are less like-
ly to occur in HMOs, as evidenced by
statistics showing that appendectomies
are about one-half as frequent and ton-
silectomies one-quarter as frequent for
HMO members as for Blue Crass-Blue
Shield members, In addition, hospital
days per 1,000 HMO members were 480
in 1970, compared to more than 900
hospital days per 1,000 members for
Blue Shield members.
FURTHER, THE HMO has a well-de-
fined consumer group that agrees to
obtain virtually all its medical care
from it. Since it guarantees that ap-
propriate services will be made avail-
able when they are needed, this feature
separates the HMO from other delivery
methods. In contrast, conventional in-
surance plans like Blue Cross - Blue
Shield merely guarantee reimbursement
for services obtained by the health
consumer.
Finally, unlike the current industry
which thrives on consumer ignorance,
the HMO enables consumers to make ra-
tional decisions regarding the care they
receive.
Purchasing a guaranteed set of serv-
ices in advance encourages consumers
to assess their health maintenance needs
realistically and decide whether the
value of the continuous service is worth
the price. Furthermore, consumers pur-
chase the services when they are heal-
thy and can make more rational decis-
ions.
THE MOST common complaint of
HMO's made by its critics is that no
patient-doctor relationship develops. The
Ann Arbor plan, however, -eems to have
adequately taken care of that com-
plaint.Each individual will be assigned
a health-team that will be in charge of
filing his or her needs. This team wil
consist of a physician and a nurse practi-
tioner. Each member, on the other hand,
will be cared for by a team of four
members.
The Ann Arbor HMO will offer serv-
ices in internal medicine and ophthal-
mology to begin with and plans to ex-
pand its services later. The physicians
will be members of the University's Hos-
pital for cases needed extended hospital
care. Unlike conventional plans, the
HMO will offer prepaid primary care
(office visits) in addition.
THE MOST important thing for a pros-
pective subscriber to remember is that
a lower hospital rate is in no way
an indication of declining quality. Stud-
ies of Kaiser Permanente, an HMO in
California, have shown that the quality
of care offered was as good if not
better than fee-for-service medical care.
This is not to say that the family doc-
tor is not a capable and useful instru-
ment in providing health care, but for
those desiring such a service, the HMO
,alternative should exist.
Alan Resnick is' an economics
major and a writer for the Daily's
editorial page. The Daily printed
an opposing view of HMOs last
year by the Medical Committee for
Human Rights, and we welcome
any further commentary on the
subject. Address submissions to the
editorial director.
south quad
To The Daily:
THIS IS in response to the
letter from "An Irate Quaddie"
in the October 11 Daily.
I am a freshman at the Uni-
versity of Michigan, living at
South Quad. There is nothing
"questionable" about our dorm.
It may be rather plain (alhough
not ugly) on the outside, but the
inside is quite pleasant. It is
.ertainly not filthy or unsafe.
There are men and women
working constantly to keep the
bathrooms, hals, and other facil-
ities clean and well-supplied.
As for being "unsafe," I ,ev-
er heard anything so ridiculous.
He (simply for convenience I'll
say he, but it could be either a
male or female who wrote the
letter) states no specific charg-
es of unsafety (except lighting
which is dealt with later) so
how can I answer them?
Letters
speaks of that were hiked so
dramatically? He doesn't say.
If he is referring to room and
board rates, doesn't he realize
that those were raised for 0ll
residents of all dorms? If he
isn't referring to those rates, I
really don't know what he could
be refering to, because I have
paid no other type of "rate"
except for house dues, which
were a whopping five dollars.
THERE FOLLOWS a rebut-
tal, point by point, of the "qoad-
die's" specifically enumerated
complaints concerning the cian-
ges made at South Quad:
a) The West Desk was closed
because it is too expensive to
maintain two desks in one dorm.
Most all the other dorms (in-
cluding Bursley which is larger
than South Quad) have only
one desk.
b) The cafeterias on the west
side have hours posted concern-
to
dining room.
d) I live in
The
Thronson House,
and our lounge has carpeting,
furniture, and curtains, pius a
piano. I don't know about all
house lounges, but I have been
in Kelsey and Huber H o u s e
lounges and they were similarly
equipped, with the exception of
having television sets instead of
pianos (Huber's TV is coljr). If
his house has been deprived of
their lounge furnishings he
should talk to his house officers.
e) I live on the seventh floor
and I received a notice (from
his so-called elusive building di-
rector) in my mail box today
stating that carpeting is to be
installed on our floor on Octob-
er 16. There will be some "in-
conveniences" to the residents,
I am sure, but that is to be
expected.
f) About two weeks ago, work-
men installed fluorescent lights
in our halls and stairways, to
Daily
like glass ones, althougn glass
ones have the advantage of al-
lowing you to see if you have
any mail without unlocking your
mailbox every time, as is neces-
sary with metal ones.
h) It is not true that we must
step outside to pick up cor
Sunday Dailies. They ara put in
the mailboxes. The reason the
Dailies were at the Est Desk
during the first week or so of
term was because both the
Daily offices and the desk were
still a little understandably dis-
organized, and the Daily offices
hadn't given the desk a sub-
scriber list, and when the desk
got the list, they were short of
help. The reason I know is be-
cause I called The Daily and
asked at the East Desk.
NEXT HE says wast siders
suffer the "greatest inconven-
iences" caused by these chang-
es. I live on the west side and
reason duty schedules are only
for the nights is because staff
members have homework and
classes too.
Next he says that the East
Desk and cafeterias are staffed
solely by students. Another be.
There are adults at both vlaces
who can either answer your
questions or direct you to some-
one who can.
IT APPEARS that "quaddie"
can never be satisfie-. If im-
provements are made, he com-
plains about the "inconvenienc-
es," and if they are not, as he
claims about carpeting and light-
ing, he complains ah';ut their
absence. He seems to expect
not only instantaneous answers
to his demands, but also totally
invisible, silent workers.
The real shame of this whsle
affair is that there are many
people who are not frim South
Quad, who will read quaddie's