Modern Monopolies: Electric Companies

Many states and localities are pushing to institute deregulation of energy companies and this move is designed to reduce electricity rates. Proponents of deregulation claim that putting the power of choice into the hands of the consumer will allow them to benefit from cheap electricity. Many consumer groups are calling for deregulation and the cheap electricity they say will come with it. Regardless of the consumer group claims of cheap electricity, the real story may not provide as clear a savings as being claimed. Cheap electricity rates may seem like a dream for many but others are looking at technology, deregulation and consumer demand as a driving force that will finally bring these spiraling costs under control.

In the early 80s the telephone companies were deregulated and this move made trying to find a phone plan that you could understand as confusing as the mobile phone and data plans and television plans are today. Proponents of deregulation say we will not have the same problems that were caused by the influx of phone companies. The infrastructure of electric service will not change, only the place that consumers send their bill and call for service. It is this continued conflict of interest that keeps consumers paying high electricity rates in deregulated states.

The real ability to have the power to choose your own electricity rates comes from the introduction of new technology such as solar and wind alternatives. Market penetration of advanced technologies is having little affect on the price of power because the price of installing the technology is not being offset by a corresponding reduction in purchased power or increased savings. Also many communities do not allow for the installation of reverse metering which can make solar or wind turbine technology more feasible for the normal household.

Single energy companies are relative monopolies in most communities and it only through utility commissions that rates remain at an affordable point for consumers. However, the introduction of additional companies while sparking competition these companies are actually buying the same power that was available prior to deregulation and are using the same infrastructure in every instance. This puts those customers who choose a lower priced alternative at the mercy of the service of the old company, which no longer has an incentive to provide top notch customer service in areas where they have lost significant users.

Visionary planning can be defined as the ability to change things for the overall good of society while dreaming may be classified as hoping that changing something just because it sounds good will result in cheaper electricity rates. Providing savings for consumers will remain in the purview of utility commissions but consumers are beginning to have their say in demanding lower electricity rates. States that have already deregulated the energy companies are finding that many regulated states are still providing their consumers with cheaper electricity rates and better service than that being offered by the new energy companies