Menu
Share
Share this story
Close X
 
Switch to Desktop Site

In deregulation of electric markets, a consumer pinch

Next Previous

Page 2 of 5

About these ads

Industry officials blame price spikes on higher fuel costs and rate caps set too low years ago. But fuel hikes are only a partial explanation, analysts say. Lack of competition and the ability of companies to sway markets to maximize profits may be factors, too, they say.

"There has been and is today no true competition in wholesale and retail electricity markets," the Electricity Consumers Resource Council wrote in a filing with the Federal Energy Regulatory Commission in November.

Power companies strongly disagree.

"Competition has been incredibly robust," says John Shelk, president of the Electric Power Supply Association. "People believe if prices rise something is wrong.... But the reason is the cost of [fuel] increased."

That hasn't cooled the anger in Pike County, Pa., which includes Milford, where residents are telling regulators that the doubling of their rates is outrageous. Just two suppliers bid in an auction to serve the area last October. "It seems a little fishy to some people," Mr. Wood says. "It's very bad for the economy here and for morale."

Some states are even considering re-regulation. But getting the "genie back in a regulated bottle" may be difficult or impossible, says Christie Rewey, an energy specialist at the National Conference of State Legislatures in Denver.

Many states sold their generating stations for a song in the 1990s, she says. Now these same states find that those old plants are a gold mine for their owners and would be very costly to buy back.

Today, 16 of 23 states that initially passed electricity deregulation offer a fully deregulated power system, studies show.

At least 34 states have repealed, delayed, suspended, or have limited retail access to just large customers or are no longer considering deregulating electricity for retail customers, according to a study last year.

Next Previous

Page 2 of 5


Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.

Loading...