A Case for Deregulation of Electrical Distribution

During this time of year it is a tradition in our town that we have many celebrations of graduations. Often these graduation celebrations are held in homes of the graduates or their grandparents. Many friends, neighbors and relatives gather together to socialize and catch up. Most of us are familiar with these events formed around marriages, friends moving to improve their careers or promotions. For the most part these events are friendly and informative. This year’s celebrations have been dominated by two topics not necessarily related to the celebration. The first topic to come up is the transportation snare up on I-75. It becomes annoying when your average speed is thirty-five miles per hour when driving to Tampa or Orlando. But as annoying as the topic of I-75 can become it does not compare to the topic of the cost of utilities. I have been caught off guard by the anger that is generated by the topic of electricity in our area. Almost everyone has a story to tell about how they are affected. I could devote the rest of this article to the stories alone, but I would rather devote my time to looking at solutions. Apparently other communities around our state and other states have grappled with similar complaints.

The prominent solutions are creative ways to deregulate the distribution of electricity. Instead of the consumer being trapped by a single supplier, many states and communities allow the consumer to decide which company they want to supply their electricity.   Fundamentally the idea of choosing who you want to do business with is taken for granted in most business transactions. In fact, most consumer decisions can be made and changed. For instance, you can decide where you would like to go out to eat and then the next time you can try another location. When you purchase a car, you can buy a Chevrolet today and later on you may purchase a Honda.   The consumer makes their decision based on their needs and which company gives them the best deal or service.

In the case of electricity, the decision can be made based on how the electricity is to be used. A company which consumes large amounts of power to produce their product is going to look for the least expensive reliable supplier so they can produce at a competitive price. Such companies would like to be able to hook up to hydroelectric systems because they produce electricity at a modest cost when compared to coal or diesel generators. A home owner may prefer to buy from a single local supplier because of the local nature of the transaction. It is obvious that there will be many different aspects to the process the consumers will use to decide which supplier they prefer, but I think my examples are sufficient to get the idea that the decision is in the hands of the consumer.

Texas is a state that has put a lot of thought into deregulation. If you would like to know more about how Texas goes about allowing consumers to make their own decisions, there is an informative web-page at: https://comparepower.com/texas-electricity-deregulation/ . There are of course many web-pages that can give opposing views that will help you to understand the issue better.