New Efforts to Re-Regulate Power Markets

The New York Times reports, in "A New Push to Regulate Power Costs," that many states are rolling back their initiatives or returning money to individuals and businesses; the article reports on specific efforts in Illinois, Ohio and Virginia. The article states that Energy Department data shows that the cost of power in states that embraced competition has risen faster than in states that had retained traditional rate regulation. One advocate of publicly owned power systems has calculated that, in the 2006-2007 Power Year, customers in competitive states paid an extra $48 billion for their power than they would have paid under rates in regulated states; further, the total real cost to consumers in states with competition was $292 billion in higher electricity prices since 2000. The article notes that since the early 1990s, 25 states adopted laws to induce some form of competition, but that most of these laws only address wholesale markets, and thus artificially induced competition in only part of the industry.