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Nathan Newman on March 20, 2006 - 12:02pm
Despite the Enron debacle, Texas was one of the states that barrelled ahead with price deregulation of electricity rates. And the results have not been kind to Texas consumers:
Under electricity deregulation, Texans have paid some of the highest rates in the nation -- a reversal of at least a decade of relatively cheap electricity under the state's old regulated system.A burst of new studies have compared changing electricity rates in states that opted to end regulation and those that did not.And the consensus is that deregulation has not saved money for consumers. Another study by MIT professor Paul Joskow found that:
[R]esidential prices in states without retail competition declined about 8 percent between 1996 and 2004. By contrast, under the same conditions, rates in Texas have increased about 2.5 percent over the same period.A few states like California and Montana are trying to reregulate their electricity markets, but that's impossible for most states. One they deregulated, the federal government took over jurisdiction through the Federal Energy Regulatory Commission and won't let them reverese the process. So deregulation has ended up being a one-way ticket to higher electricity rates for states that recklessly deregulated their markets without knowing what the consequences would be.