Guest letter written by: Shane McNamee, policy analyst at the South Carolina Policy Council
In South Carolina — as in most other states — regulation has almost completely divorced the energy sector from the free market. Private energy providers must register with the state as public utilities. Once registered, the state helps enforce a monopoly territory where only one utility may provide power. Regulators determine the prices energy providers can charge. All of this regulation, we’re told, is in the best interest of all parties: It keeps prices down and prevents rapacious monopolies.
Only it doesn’t.
Over the last nine years, two of South Carolina’s largest utilities, SCE&G and Duke Energy Carolinas, hiked rates by more than 20 percent over inflation growth.
It’s not clear why energy providers should be immune from competition. Competition forces businesses to innovate new ways to best serve the consumer. A privately owned monopoly with government backing is one of the worst arrangements for consumers.
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