All blame deregulation. All favor reregulation. All are misguided.
Virginia's electric power playHere's the nut of it:
By Jerry Ellig, writing in the Washington Times
Electricity markets have changed in unanticipated ways since legislators passed Virginia's original electricity restructuring legislation in 1999.
Virginia's 1999 legislation permitted consumers to buy electricity from any company licensed by the state to sell electricity. Utilities' electric rates were frozen until 2010, with some exceptions for fuel price increases.
The biggest utility, Dominion Virginia Power, could seek rate increases linked to increased fuel prices this July. The theory behind the legislation was that competition would gradually become strong enough that the utilities' prices could be reregulated.
But few competitors showed up. As in many states, Virginia's rate caps gave competitors little room to undercut incumbent utilities. Consumers got a break on rates, whether they bothered to shop around or not. Consumers who switched paid the utility a "wires charge" calculated to give much of their savings to the utility.
As a result, only 1,300 residential customers bought electricity from someone other than their utility in 2006, according to the Virginia State Corporation Commission. (link)
● Electricity was "deregulated" in 1999.
● In the process, our "deregulated" electric rates were frozen in time, by law, until 2010.
● And permanent caps were placed on rate increases in our deregulated system.
● And we declared this rate-capped, for-a-time-rate-frozen utility to be deregulated.
As a result of this bewilderingly boneheaded attempt at introducing free market conditions into our electricity delivery system, in a manner Vladimir Ilyich Lenin would admire, strangling any actual opportunity for market forces to gain traction, we become completely shocked by the fact that (a) no competitors show up to challenge our existing utility companies and take advantage of this still-heavily regulated industry, (b) only 1,300 users are able to purchase electricity from a competitor, and (c) rates that have been frozen for ten years are soon to skyrocket.
Now everyone is calling deregulation a failure and is clamoring for reregulation.
If what we had was deregulation, I'd hate to see what regulation is.