After Decades Of Doubt, Deregulation Delivers Lower Electricity Prices

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Excerpts from the Forbes article on energy choice. Shopping for power can help empower consumers to select an energy plan that best suits their needs.

Written by William Pentland

More than two decades ago, federal and state governments began dismantling electric utilities’ monopoly on generating electric power.

In the early aughts, deregulation suffered a severe setback as the result of California’s energy crisis.

“The verdict is in: California’s experiment with energy deregulation is not just a mess; it’s a certifiable failure, according to everyone from the state governor to the very utilities that initially backed the scheme,” wrote Charles Feldman, an investigative reporter for CNN, in 2001.

For the better part of a decade, the facts cut in favor of Feldman’s grim conclusion.

That has at least partially changed. To the extent is hasn’t, regulation (not deregulation) is too blame.

Similar to what happened in the airline and telecommunications industries, deregulation was supposed to reduce the prices consumers paid for electricity.

After a decade of doubt, it has done precisely that.

The trouble is that while wholesale power prices have fallen dramatically, retail power prices have soared. This dynamic may drive a second and more aggressive era of deregulation.

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