From Arizona: Electricity deregulation doesn’t work in the real world
Then, as now, there were significant problems with this proposal. The aspiring sellers in a deregulation scenario certainly wish to profit by selling electricity, and profit honestly earned is a good thing. But in states that have tried this system, those sellers have targeted the large customers from whom profit is easily gained. They bear no responsibility for delivering affordable power to all customers — such as residents or small businesses — or for ensuring adequate generation and reliable transmission to meet future needs.
In light of California’s disastrous experience with electric deregulation — rolling blackouts and roiling price spikes — the ACC wisely abandoned its efforts to create a similar system here. Other states pressed on despite the risks and structural deficiencies. They have reaped volatile rates, increased customer complaints and dwindling energy reserves.
Texas, which once enjoyed a healthy surplus of energy resources, is now struggling to maintain enough capacity to avoid outages. And while rates are presently reasonable, recent analysis concluded residential customers in deregulated areas of Texas likely would have saved more than $10 billion had rates remained regulated. Combined with the legacy of California’s rolling blackouts and the Enron price-manipulation scandal, such results prove the slogan-driven theory of electric deregulation a dismal failure.
It may therefore surprise Arizona consumers to learn that this idea has resurfaced before the ACC. While anything hyped as “market competition” might hold appeal, the scheme proposed does not amount to competition; far from it.
In the end, it will simply mean higher electric bills and a less-reliable grid for homeowners and small businesses.