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Utility deregulation

Unregulated competition can never work for the electric utilities industry because electricity is unlike any other consumer product.            

With electricity, consumers will never have many of the choices that they have with other products, such as automobiles.

For example:

In the automotive market a customer can buy a new car from many different manufacturers, foreign and domestic.  In the electricity market, maybe a customer can buy new electricity from only a few domestic suppliers.

A customer can chose between many different types and qualities of vehicles and models.  All electricity is basically the same, provided it is reliable.

A customer can repair and continue using his old car.  Electricity cannot be repaired or re-used.

A customer can rent a car.  Electricity cannot be rented.

A customer can use public transportation instead of buying a car.  In the electricity market there is no analogous public alternative.

A customer can hire cabs instead of buying a car.  In the electricity  market, there is no analogous alternative.

In some circumstances a customer can walk or ride a bike instead of using a car.  In the electricity market, there is no analogous alternative.

In many cities, it is not necessary to own a private car.  Everyone must use electricity.

Thus, an automotive manufacturer must compete not only against other manufacturers, but also against a wide variety of customer choices.  These customer choices do not exist in the consumer electricity market.  

Unregulated competition in the electric utility industry is a disaster for consumers because there will always be insufficient customer  choice.
On On electricity deregulation posted 2 years, 2 months ago 16 Responses