Reason Number Six Why IBM Outsources: Those High Electricity Rates In Vermont - InformationWeek

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IT Leadership // IT Strategy
Commentary
1/4/2007
03:27 PM
Paul McDougall
Paul McDougall
Commentary
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Reason Number Six Why IBM Outsources: Those High Electricity Rates In Vermont

In addition to a hangover, Vermonters rang in the new year with higher electricity rates thanks to a 9% increase by Green Mountain Power Corp., which supplies much of the state's electricity. Among the opponents of the hike was that bastion of populist outrage--IBM.

In addition to a hangover, Vermonters rang in the new year with higher electricity rates thanks to a 9% increase by Green Mountain Power Corp., which supplies much of the state's electricity. Among the opponents of the hike was that bastion of populist outrage--IBM.According to SEC documents filed by Green Mountain last month, it sounds like IBM--which operates a microelectronics plant in Burlington--spent considerable time and energy opposing the increase.

The computer maker "maintains the plan is not in the public interest and should be rejected or significantly modified," according to Green Mountain's filing. "IBM avers that the plan does not provide accurate price signals to customers," the document goes on to say.

IBM is concerned about accurate price signals? Ever check out a Websphere licensing agreement? Ever try and break down the day rate for an IBM consultant?

There's more: "IBM asserts that the Board should modify the Earnings Sharing Adjustor calculation so that [Green Mountain Power] may not recover certain energy-related power costs that are specifically excluded from the Power Adjustor." Power Adjustor? I don't know what that is but since it sounds like Power Architecture I'm guessing IBM will soon hit Green Mountain with a patent infringement suit.

In fighting Green Mountain's rate hike--which has gone into effect despite the opposition--IBM found itself allied with, oddly enough, the American Association of Retired Persons. Now that's ironic. Here's a corporate titan that last year froze pensions for 120,000 of its retirees lining up with the AARP.

IBM can simply get around this whole issue by moving that microelectronics plant to India, where the company is investing $6 billion over the next two years. In fact, IBM will fit right in there. The last time policy makers in the Indian state of Karnataka tried to raise electricity rates, citizens took to the streets in protest.

Alternately, IBM could just run its whole operation in Second Life, and pay for its electricity in Linden Dollars.

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