Electricity Deregulation in Pennsylvania

In 2010, PPL rate caps will expire, which is expected to result in a sudden rise in the price of electricity. Ending government regulation signals an end to artificial prices and opens up the electricity industry to market competition.

The Morning Call takes a look at the fallout. Their research finds companies brace for a rise in energy costs by innovating new ways to eliminate waste and increase industrial efficiency. Deregulation is even good news for environment advocates since alternative sources of power, including wind power, can now compete in the absence of government protected power monopolies.

Deregulation campaigns across the country have produced mixed results because the efforts come with new restrictions offsetting the benefits of market competition. California’s failed efforts included rate caps and required all electric suppliers to buy power on the state’s exchange markets. On the other hand Texas fully deregulated their electricity industry creating more choices for consumers at lower prices.

What have Pennsylvanians gained from artificially low electricity prices? They’ve gained a lack of incentives to develop alternative sources of energy, continued waste in industry and now a sudden rise in their electricity bills.

The Competitive Enterprise Institute provides more information on the electricity deregulation debate.