Menu

Throwback Thursday: Revisiting Electric Deregulation Disasters

Legislators may be on break, but Michigan’s energy issues are still getting plenty of attention in the local media. Some proponents of deregulation are using this time to generate fear around the Nofs-Proos legislation.

So—in the spirit of “Throwback Thursday,” we want to remind everyone why a Michigan-first energy policy should be a critical priority for elected officials in Lansing.  Here are just a few of the disasters deregulation has led to in other states:

Texas

Texans have been living with partial deregulation for over a decade. The numbers from Texas show us just how much more deregulated consumers paid when compared to their regulated counterparts. Texas consumers have paid billions and dealt with rolling blackouts as energy reserves dipped below prescribed margins.

California

The name Enron has become synonymous with corporate corruption and California’s deregulation nightmare. And for good reason.

Inflated prices and artificial shortages created rolling blackouts at peak demand times, including a heat wave. Consumers lost money and small businesses closed because they were unable to ride out the price volatility. Enron’s experiment threw California’s economy into chaos and left Californians with massive debt and unemployment.

Ohio

The plight of Ohioans should sound eerily familiar to Michiganders. Retiring power plants have put a strain on supply and reserves, prompting the governor to admit electric deregulation was a bad idea. Faced with losing more capacity than is being built, Ohio is scrambling to re-regulate their electric system in order to ensure reliability for consumers.

Illinois

Our neighbors in Illinois face similar struggles. Five out of eleven nuclear plants in Illinois are at risk of closure.  In June, a large energy provider in Illinois announced it was shutting down two of its nuclear plants, citing lack of progress on new energy legislation.   This would be disastrous to reliability in a time when the region is already facing power shortages.  Even worse, it would result in the loss of $1.2 billion in annual economic activity and 4,200 local jobs.

Montana

Montanans lost control of their energy infrastructure under deregulation after a private energy company sold their hydroelectric dams to multiple out-of-state entities. Even after the state re-regulated, the $900 million it will take to buy their infrastructure back will result in higher energy bills for Montana consumers for years to come.

If those who ignore history are doomed to repeat it, Michigan should act promptly to secure Michigan’s energy future. Every delay puts us further behind schedule in replacing the energy infrastructure we are losing as older coal-fired plants continue to close.

For more stories of deregulation disasters, check out this map.