Gee, I Am Very Surprised No I'm Not.

From today's EEI newsletter:

Research Shows Deregulation Hasn't Brought About Lower Rates Promised

According to an analysis by the Associated Press, "Not one of the 16 states - plus the District of Columbia - that have pushed forward with deregulation since the late 1990s can call it a success." In fact, wrote the AP, "consumers in those states fared worse than residents in states that stuck with a policy of regulating their power industries. The idea was to move from a monopoly situation to robust competition for electric customers, with backers promising potentially lower rates in state after state. But competition, especially for residential and small business customers, rarely emerged."

As a result of politically-imposed deregulation, utilities were often put into a situation where their rates were artificially frozen for several years – an action that the AP suggested "drove potential competitors away. [Analysts] point to states like Illinois, where rate caps just recently were lifted and where there already is talk of reinstating them." Utility officials also pointed to the price of fuel for the power plants as the critical factor in higher costs to consumers.

The evaluation by the AP was based on the average electric rate that residential customers paid annually from 1990 to 2006 and a comparison of regulated and deregulated states. Wrote the AP: "The analysis found more than a widening price discrepancy. Consumers in deregulated states also have suffered from bigger price swings, as rate caps in place when deregulation began in the late 1990s were lifted in the last couple of years."

Associated Press via the San Gabriel Valley, Calif., Tribune , April 25.


Hmm, maybe those old farts knew something back in 1935 after all.