The Yellow Sheet Report says tonight the Goldwater Institute (GI) wants Arizona to take a leap into electricity deregulation, exchanging the familiar for the promise of more efficiency and better rates under a restructured energy system.
The idea is choice and competition will presumably produce more power and do it at less expense, just as it did with the telecommunications industry. In a policy report titled “Moving Forward: A Road Map for Choice and Competition in Arizona’s Electricity Markets,” GI holds up Pennsylvania and Texas – and countries such as Canada and Chile – as examples of places that have successfully deregulated.
Texas, the report said, saw its electricity prices drop by 13 percent below the national average. (One study, however, has shown that a decade after deregulation in Texas, the average utility cost actually went up for customers of deregulated utilities.
GI said restructuring won’t be easy and it must be done right, but markets in the U.S. are now “mature” enough for deregulation. The report laid out three stages for accomplishing this goal:
- First, the Corporation Commission must separate generation, transmission and distribution – essentially, break down the current system into these three sectors, with a neutral entity overseeing the grid’s operation.
- Second, the commission must create the conditions for a competitive generation markets, where companies can freely compete to sell electricity.
- Finally, it must “empower” consumers to freely choose their retailers.
