Every few years, proponents of deregulation try to peddle the notion that Florida should do away with the protections afforded by the state’s regulated electricity system. It’s about consumer “choice,” they say… obviously “competition” means lower prices for consumers … right?
While supporters of deregulated electricity claim that competition will drive cleaner, cheaper and more reliable electricity service for consumers, the facts and history simply don’t support those claims.
According to the latest Energy Information Administration data, consumers in deregulated electricity states pay substantially higher prices for power — 21 percent higher than the U.S. average and 29 percent higher than the Florida average.
And, incredibly, consumers in deregulated markets pay a whopping 49 percent higher price than what FPL customers pay.
Before Enron became a household name, deregulation was en vogue. States rushed to deregulate. Then, like a Bernie Madoff investment, the bottom fell out.
California faced an energy crisis, with brownouts plaguing its cities as regulators couldn’t enforce reliability standards. It got so bad that California suspended its deregulation movement. Other states also pulled the plug on deregulation experiment.
Today, only 15 states and the District of Columbia still have deregulated electricity markets. And the average electricity price in every single one of them is higher than what FPL charges.
A proposal submitted to Florida’s Constitution Revision Commission (CRC) would amend the state’s constitution to deregulate electricity here. Its backers claim deregulation will save Floridians “billions” of dollars on electricity costs. Sure, some might save. Indeed, Walmart is known for flexing its corporate muscle and exploiting deregulated energy markets to bolster its profits. It is a leading distributor of deregulated snake oil, and now they’ve set their sights on Floridians. We shouldn’t take the bait.
In states that have gone down the deregulation road, consumers have been victimized by price manipulation and bankruptcies, and communities have seen the loss of thousands of good-paying local jobs. Florida would be wise to learn from the mistakes made by other states.
ERIC SILAGY, JUNO BEACH
Editor’s note: Eric Silagy is president and CEO of Florida Power & Light Co.
Today, only 15 states and D.C. still have deregulated electricity markets.