Paul Wilczynski's Observations

Deregulation don't always work the way it's supposed to

The Christian Science Monitor reports ...

It's the slow season for the laundromat in tiny Milford, Pa., yet owner Darryl Wood has raised the price of a wash by 50 cents this year, to $2.50. The reason? Electric rates have more than doubled since January, threatening to close the lid on a business his family has run for decades.

"I've already seen an electric bill higher than anything that I've ever gotten," he says. "I thought deregulation would bring rates down. Now, I'm just hoping we can hang on."

His ordeal reflects the fresh dismay many consumers are feeling about the deregulation of the electric utility industry. When deregulation was implemented in the 1990s, supporters said it would drive rates down through competition.

But data so far suggest that rates in deregulated states are rising faster than those in regulated states. That trend could expand as caps on retail electric rates, which have held prices down, are lifted in at least six deregulated states this year. ...

Does that smack even a little of Enron-style manipulation? That free-market economy thang ain't always what it's made out to be.

posted by Paul Wilczynski @ 11:06 AM