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Lest We Forget: America’s Electric Deregulation Failures

When it comes to electric deregulation, the Alliance for Michigan Power has always been clear on our stance: it doesn’t work.

It doesn’t support Michigan jobs

It doesn’t encourage investment in Michigan’s energy infrastructure

It doesn’t let us plan for Michigan’s energy future, including our projected capacity shortfall.

And it doesn’t help us keep electricity reliable and fairly priced for all Michiganders.

A History of Failure beyond Michigan

You don’t have to look far to find examples of the failures of electric deregulation in just about every state that has tried it.  We discussed this at length last year, and Citizens for Michigan’s Energy Future has also been exploring some of the more egregious examples. 

Here’s just a handful:

• Massive Rate Increases in Illinois.  Instead of seeing the promise of lower rates fulfilled, Illinois consumers saw “soaring rate spikes” and “anti-consumer market-manipulation tactics” similar to the ones “that California consumers were subjected to by Enron in the early 2000s.”

• California’s Full-Blown Energy Crisis.  Speaking of the Golden State, their experiment with electric deregulation was a short, but messy, affair. “Intended to lower electric rates and improve reliability, deregulation did neither: rates tripled within a year and rolling blackouts became the norm.”

• Maine Governor Speaks Out. In Maine, where “rates are 37 percent higher than the national average,” Governor Paul LePage has a very pointed view of electric deregulation.  He noted that these costs have hurt Maine’s business climate, calling deregulation “the worst thing we could have ever done.”  Now that’s not mincing words.

• Pennsylvania Consumers in for a Shock. After deregulating electricity in the Keystone State, consumers cried foul when they saw “rate spikes of 300%,” prompting a joint complaint by Attorney General Kathleen Kane against five retail energy companies.  She said, “These spikes in the price of electricity are alarming and have put many consumers, especially the poor and elderly, in a dire situation.”

That’s only a quick look at some of the (often spectacular) ways in which electric deregulation has been a disaster in the states that have tried it. 

As Lansing considers new energy legislation, our elected officials should keep these examples in mind.  We need a well-regulated electric market to ensure Michiganders don’t end up footing the bill for yet another disaster in the long run.

Do you have questions about electric deregulation? Let us know!