Electric Deregulation Produces No Worthwhile Results For Consumers

It should come as no surprise to the average person paying a utility bill that electricity deregulation in Texas has shown consumers few if any benefits.

However, it has helped electric companies see massive profits:

These enormous profits were one surprising result of a massive deregulation effort on the part of 21 states a decade ago that overhauled the business of providing electricity — all in the name of stimulating competition and lowering utility bills.

But they weren’t the only surprise. So far electricity is the only deregulated industry that has not produced consistently lower prices for consumers, who, after similar efforts, now enjoy lower plane fares and long-distance telephone rates.

Indeed, the biggest beneficiaries of energy deregulation seem to be big investment firms, like Kohlberg Kravis Roberts and the Carlyle Group, that, with their partners, have been able to flip the power plants — meaning that in short order, they sold them at a much higher price than they bought them.

As for consumers, on top of their ordinary electric bills, many continue to be saddled with monthly surcharges that were slapped on their bills years ago to cover construction costs for plants that were sold and then resold at huge profits. These surcharges will continue for a long time.

This is clearly something the Texas Legislature should take action on. If Company X built a plant and then sold it to Company Y for a profit, Company X should not be able to continually legally bill its companies for the plants.