Deregulation FAQ

Who is pushing for deregulation?
Power marketers, big corporations and their lobbyists.

What's happening nationally with deregulation?
Some states are stepping away from deregulation, based on problems encountered where it has taken place.

What are the arguments for deregulation?
Customers should get a choice, and suppliers should compete for their business. Competition usually drives down costs, but it doesn't always work that way. Public utilities are one type of business where that's the case.

Shouldn't the law of supply and demand work in favor of the consumer in an open marketplace of electricity suppliers?
In one of the first tests of a deregulated environment - some particularly hot days in the summer of 1999 - wholesale electricity prices soared in East Coast auctions. The soaring costs were passed on to the consumer, of course.

California also was a major test of deregulation. What happened there?
Some power marketers, able to buy and sell electricity without any limits on profit, raised their rates to the point that many customers saw their power bills triple almost overnight.

So then, how does the notion of deregulation fit with the mission of an electric cooperative?
Having to compete in an unregulated environment, where size and the influence can become an overriding factor in the costs of procuring electricity, would not necessarily bode well for the co-ops in this country and their millions of customers.

Who benefits the most from deregulation?
Big industries naturally could be expected to get a better price than individual homeowners. Deregulation also empowers energy brokers, whose role is not nearly as prominent in the traditional system of protected utility service areas and providers.

How do you recommend Joe Wheeler EMC members view the question of deregulation?
With caution. Deregulation may increase the cost to you, the consumer, should power prices spike as they did in deregulated states.