Josiah Neeley writes about competitive electricity markets in Reason.
- A recent New York Times article claims that deregulated energy markets lead to higher costs for consumers.
- Competitive electricity markets allow consumers to pick their power provider, which often leads to lower utility costs.
- Competitive electricity markets have also been linked to increased clean power generation.
- State-level regulators should look for ways to increase competition in their power markets to lower costs for consumers.
“That leaves the third explanation by the Times, the old staple of anti-market thinking: Competition leads to higher prices because of ‘profits taken in by energy suppliers.’ Based on reading the Times article, you might be surprised to learn that monopoly utilities also make profits. Indeed, utility rates are typically set to give the utility a set percentage of profit based on their past investments. This, needless to say, does not encourage utilities to find ways to lower costs.”
Read the full article here.
The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.
