Even with convincing evidence that deregulation has failed to deliver promised benefits, efforts to restore public oversight face tough resistance. The reasons involve policy inertia—and blind faith in free markets.

Half-hearted deregulation hobbles the forces of supply and demand before they can get out of the gate.

Significant rate increases in many retail-access states have regulators and policy-makers asking whether customer choice and utility restructuring have failed, and what they can do about these rate increases.

News Digest

 

The crazy quilt emerging in restructured markets only impedes competition.

The enthusiasm among energy retailers has become infectious. It grows as each successive state opens its market to competition. Yet behind the promise lies a grim reality.

Retailers struggle against a tide of thin margins, high customer-acquisition costs, inconsistent rules and regulatory prescriptions for the unregulated market. With all the rulemakings and workshops, the dollars budgeted by utilities to implement retail choice rise above even the level of spending to eradicate the Y2K millennium bug.

Our industry stands at the threshold of significant change. Competitive forces and significant technological advances beckon the nation's electric utilities to step forward. The electric industry has the opportunity to create a future that provides the benefits of competition to all customer groups. If we don't restructure, someone else will do it for us.