An oft-heard argument these days says that states with low-cost power should refrain from restructuring their electric utilities. This argument has gained credence in some states, where protectionists have used it to slow down the liberalization of electricity markets. The rationale is simple: Because the state would export its low-cost power, local consumers would lose. They would face higher electric prices than if their state had somehow confined its low-cost resources within its boundaries. Some regulators voice the same opinion: "Why should we share our low-cost resources with other states when it would only drive up prices in our own state?"
This prediction of higher electric prices in low-cost states comports with a "regional averages" hypothesis. To say it differently, interstate trading yields a zero-sum game; out-of-state consumers would benefit, but at the expense of in-state consumers. Some economists color this outcome as an "exploitation" transaction, suggesting that free-market trading produces gains for some but losses for others.
On the other hand, restricting power exports implies that the current beneficiaries of low-cost electricity are entitled to some special right to it.