For years, proponents of electricity deregulation have argued that competition lowers costs for consumers. New data tells a very different story.
According to new proprietary analysis by Power for Tomorrow (PFT), informed by 2024 Energy Information Administration (EIA) data, residential customers in deregulated electricity states are paying dramatically more for power than those in traditionally regulated markets.
Read MoreA recent poll of Louisiana voters, conducted by Peak Insights, reveals a striking trend: while many initially support electricity deregulation, that support collapses once they learn what it actually means.
Read MoreCompared to utilities in states that stayed regulated, deregulated utilities faced significantly higher costs of energy. This resulted from both higher wholesale prices as well as purchasing a higher share of energy, instead of generating it. We find that restructuring lead to sharp increases in wholesale prices despite reductions in marginal fuel costs, such that generation facilities were able to charge prices at substantial margins above costs. We show that this can explain a large portion of the increase in retail rates after the restructuring of the electricity sector.
Read MoreIn this white paper, the WBK team (Tony Clark, Ray Gifford, and Matt Larson) makes the case that a vertically integrated utility (VIU) model provides a tried and true pathway to implement state policy directives and achieve outcomes in the best interests of customers. The political allure of utility restructuring is understandable. It caters to the interests of both libertarian-minded “free market” advocates and those on the left who may be suspicious of VIUs serving a captive customer base. But for present-day leaders of states that have not restructured, it is worth understanding the foundation of the VIU and its comparative advantages amidst ongoing energy policy debates.
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