AARP opposes electric deregulation in Arizona
“Deregulation won’t mean lower rates, it may mean paying more for power for many Arizonans,” said David Mitchell, AARP Arizona State Director. “This is evidenced by many people in deregulated states paying higher rates for their electricity after deregulation. Arizona’s residential electrical rates are already below the national average. With our hot temperatures why gamble with the pocketbooks and safety of Arizonans through deregulation? In our state we’ve never suffered a shortage of electrical generation and our low utility rates are attractive to businesses.”
In its written response, AARP also stated that costs to implement the restructuring of the electric utility industry would be significant and would be ultimately passed onto rate payers.
Implementation costs associated with deregulation would include licensing, billing, and paying existing utilities’ huge financial obligations for large-scale investments made under the current regulated system. If these obligations are passed onto ratepayers, so-called “stranded” costs would greatly reduce any residential savings.
AARP recommends the Commission focus on implementing current Arizona law that requires oversight of utilities to ensure “just and reasonable” rates for essential electricity service. “Our current system of regulation of utilities has actually produced power for residences at below the national average cost,” said Mitchell.
“In addition to seeing higher rates and implementation costs, some consumers in deregulated states have been subjected to unfair and deceptive marketing practices,” added Mitchell. “AARP believes under deregulation, Arizonans could experience marketing abuses including pressure tactics, high termination fees and misrepresentation of contract terms.”