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Lawmakers Down Under Skeptical of Electric Deregulation

There is no shortage of woeful tales here in the U.S. regarding the deregulation of electricity.  Just as we have learned from the failure of electric deregulation in other states and even other industries, Michigan can take a lesson from similar concerns being raised in other countries.

Australian State Escapes Deregulation

In Australia, the state of New South Wales—which includes Sydney—had been considering deregulating their electric markets beginning July 1.  The effort has stalled because multiple political parties are concerned the measure would bring higher electricity prices, and the state government was worried enough that they sent residents “price relief” notices.  

In fact, one New South Wales politician had particularly harsh words for New South Wales Premier Mike Baird, who pushed for the deregulation scheme.  

“‘The Baird government arrogantly assumed the Upper House would join them in abandoning consumers to electricity retailers who are known for their predatory behaviour,’ claimed legislator John Kaye.  ‘All that is left of the Baird government’s electricity price deregulation is a glossy pamphlet, a divided upper house and thousands of confused households.’”

Concerns Raised Reflect Reality in Some U.S. States

Mr. Kaye’s worries about predatory behavior and confusion among consumers have actually been borne out here in the States.  Earlier this year, we blogged about how unscrupulous retail electric marketers can be and shared an article that concluded these companies “aggressively employed telemarketing, door-to-door visits, TV ads, and pamphlets, luring customers into restrictive contracts promising savings that did not materialize.”

Moreover, extreme price fluctuations have been observed in several states that have tried deregulation, along with issues with reliability and negative economic impacts.

Here in Michigan, legislators reviewed the issue and have seemed to put it back on the shelf for now.  However, while lawmakers have backed away from deregulation for the time being, it’s not entirely off the table, which is why it’s important to stay involved with AMP and remain informed on the energy issues that impact all Michiganders.