Here’s a key snippet from Ike Bannon’s recent Forbes column on the price impact of competition on reorganized markets. Bannon points out that while the cost of electricity in reorganized markets has risen at about the same pace as in monopoly markets, customers have been able to purchase cleaner, renewable energy. More needs to be done to educate consumers in energy choice markets and to boost competition in partially reorganized markets.
“…. Late last year the Energy Information Administration published an analysis of customer choice programs. It found that participation in these programs is virtually unchanged since 2013, and that while commercial and industrial customers have benefited from competitive electricity markets, residential customers have generally paid more per kilowatt hour through competitive suppliers than non-competitive suppliers.
“This phenomenon does not by itself indicate that deregulation has not worked as advertised: part of the reason that choice may not coincide with lower prices is because, in states that have made utilities divest their power production, utilities must generally purchase energy from the low-cost supplier for customers who do not join a customer choice plan, which is tough for even savvy consumers to improve upon.
“Also, many households that do join a customer choice plan may be motivated to purchase energy from a higher-cost source because it comes from a supplier that will emit fewer greenhouse gases. “
Read more in Forbes.