Electric deregulation means higher power bills

Posted on Sep. 28, 2022

The Louisiana Public Service Commission is considering allowing other businesses, known as competitive suppliers, to sell electricity to customers and compete with our state’s regulated power providers.

But in other states that adopted deregulation, residents spent billions more, not less, for electricity, according to The Wall Street Journal.

Consider Massachusetts, where between 2015 and 2020 people paid $426 million extra for electricity because of deregulation and competitive suppliers.

This is why the attorney general of Massachusetts (a Democrat) and representatives of the governor (a Republican) testified in the state legislature against competitive electric suppliers. The representative from the governor’s office stated "…the evidence shows that it has increased rates, particularly for the state's most vulnerable residents, and is causing them undeniable harm.”

Speaking of targeting a state’s most vulnerable residents, such as senior citizens, the advocacy director of the AARP in Connecticut penned an op-ed calling out a bait-and-switch tactic that many competitive suppliers use to “auto-renew” customers into contracts where the electric bill rates quickly escalate.

Knowing that deregulation means higher power bills and an influx of opportunistic competitive suppliers who will prey on vulnerable customers, it is surprising that New Orleans City Council members Helena Moreno and JP Morrell are seemingly endorsing this bad public policy.

Another issue with deregulation is power shortages.

Texas, our neighbor and arguably the most deregulated state in America, teetered on the verge of rolling blackouts all summer. To avoid collapsing during heatwaves, the state-run electric grid paid businesses billions of dollars to shut down or reduce operations. Worse, this broken system actually costs more; because of deregulation “Texans overpaid more than $28 billion for electricity,” according to an investigation by Houston station KPRC.

In California — also a deregulated state — a massive heatwave last week meant the state had to urge people to set their thermostats to 78 degrees and not charge their electric vehicles.

It should be noted that the Louisiana Public Service Commission is also considering deregulation only for large corporations like oil refiners. But again, this would mean higher power bills for Louisianans. Why? Because the corporations could use their buying power to corner the market on the lowest cost electricity, leaving the most expensive power for everyone else.

Another potential concern is that this type of deregulation could undermine the long-term maintenance of the power grid, which is unconscionable in a state prone to hurricanes.

Finally, I am not insinuating that Entergy, SWEPCO, CLECO and other utilities are perfect. Rather, I am insisting that deregulation is bad for average customers, leaving them paying more for electricity that is less reliable.

The best path forward for Louisiana is clear: Regulators need to work with utilities to ensure affordable and reliable electricity.

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