Deregulated Electricity is Costing More, Not Less

Photo (cc) by nayukim

The Arizona Corporation Commission is considering deregulating the state’s electric utilities, but there’s evidence from the places that have deregulated that it hurts consumers in the long run.

For instance, in the 85 percent of Texas that has been deregulated since 2002, prices are up to 40 percent higher than in the regulated areas, MainStreet.com says.

Bloomberg reported last year:

Texans paid some of the lowest rates in the country before the changes, according to the U.S. Energy Information Administration. Now they pay the fifth-highest electricity prices. The policy shift toward competition has also misfired in other states including California.

A 2011 analysis conducted by JBS Energy economist William Marcus, using U.S. Energy Information Administration data from across the country, found that “there is about a 10 percent increase in residential rates associated with deregulation,” even after accounting for underlying cost differences between states that do and do not regulate prices.

The debate in Arizona about the change continues. Among the groups opposing deregulation there is AARP. The Republic newspaper reported:

“Deregulation won’t mean lower rates, it may mean paying more for power for many Arizonans,” David Mitchell, AARP Arizona director, said in a statement. “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.”

Regardless of the status of regulation in your state, there are lots of things you can do to cut your own energy costs. Use the tips in the video below and you’ll be saving money on the power bill this winter:

Do you live in a deregulated state? How has your energy bill changed over time? Let us know your thoughts on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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