Why Deregulating Utilities Fails to Deliver More Power

As the federal government explores ways to boost electricity supply for America’s growing data and AI economy, some are advocating for more “competition” through utility deregulation. But as economist Ed Hirs argues in The Hill, this approach is deeply flawed—and the data backs him up.

Deregulated states like Texas are falling behind when it comes to building the power infrastructure we need. Despite claims of “free-market” innovation, Texas and other deregulated markets are plagued by blackouts, massive overcharges ($28 billion, by one estimate), and little investment in new power plants. Instead of funding new generation, profits are flowing to shareholders and hedge funds.

In contrast, regulated utility states like Virginia and Georgia are actually delivering, attracting new data centers and building the generation capacity to support future demand. Why? Because regulated utilities must plan for long-term reliability, not just short-term price signals.

Hirs likens deregulated grid operators to Soviet-style entities—powerful, unaccountable, and ineffective. His message to the Department of Justice: if you want more power and lower prices, look to the states that never bought into the deregulation hype.

Bottom line: Deregulation isn’t delivering. If America wants reliable, affordable electricity to fuel its future, it’s time to stick with—and strengthen—traditional regulation.