Electricity deregulation leads to higher bills

“Once more, with feeling, we say: Re-regulate electricity! According to the consumer group Texas Coalition for Affordable Power, ratepayers in deregulated areas have coughed up $22 billion more than those in regulated service areas over the past decade.” – Houston Chronicle. January 3, 2014

Other states that have tried energy deregulation have seen electricity bills grow higher and higher for families and businesses. This is bad for the local economy and job creation.


California’s deregulation of electricity created a statewide energy crisis that led to higher prices for families and business, rolling blackouts, price gouging, market manipulation, and home-state utilities nearly filing for bankruptcy. A national Public Television article reports year-by-year on what they dub the “California Crisis” and the significant problems that occurred.


When Illinois decided to experiment with deregulating electric rates, according to USA Today, some families saw their monthly electric bills “double and even triple.” Things got so bad, the Attorney General of Illinois had to file a federal complaint to stop price gouging and collusion according to the St. Louis Post Dispatch. A Public Sector Consultants report on Illinois noted that dissatisfaction with the results of deregulation has led to a sharply expanded role for government.

New Jersey

In a recent report on New Jersey stated that the high electric prices that prompted New Jersey to deregulate 14 years ago persist—New Jersey still has the 6th- highest electricity rates in the country. The report stated that following transition period to deregulation, electric rates in New Jersey went “from 9.3 cents/kWh in 2002 to 14.3 cents/kWh in 2011—a 54% increase.”

In February of 2014, the New Jersey Star-Ledger reported that electric prices are “soaring for NJ customers who switched power suppliers.”  The article notes that citizens were in shock when they got their bills.  The Star-Ledger reported, “Systrum Energy had tripled the per-kilowatt-hour price it charges for electricity. His January bill was $160, a 200-percent increase. His February bill was even higher. He has now taken to shutting off lights in his home to save money. The price spike has eliminated the savings accrued since Jung left Jersey Central Power & Light, the state’s second-largest utility.”

New York

In 2013 the New York Attorney General testified to the State Public Service Commission that 91.5 percent of upstate low-income consumers who had switched providers were paying higher rates than if they had stuck with the traditional utility. The Attorney General went on to say that, “low income ESCO customers paid a net premium $19.2 million more than what they would have paid NiMo for commodity supply service during this two-year period.”

In New York, out-of-state predatory energy marketers have been caught misleading consumers about lower bills. One predatory energy marketer, Just Energy Group, was fined $200,000 by New York attorney general in 2008 for deceiving customers.


When Texas decided to experiment with deregulating their electricity, families and businesses paid dramatically increased prices on their electric bills. NPR reported that, “a typical electric customer paid $3,000 in added costs over the last ten years because of deregulation” The report estimates that Texans spent $11 billion cumulatively because of higher rates.” Further, the San Antonio Express-News reported

In Texas a recent energy report by Public Sector Consultants stated, “prices in the deregulated areas steadily climbed as natural gas prices rose in the mid-2000s. From 2002 to 2006, the price to beat rose 88% and the competitive offers rose 62%. In contrast, rates in regulated areas of Texas rose only 24% during this period. For over a decade, deregulated areas of Texas have consistently paid more for electricity than regulated areas of the state. And prices are more volatile in deregulated areas.”


In Pennsylvania, the Attorney General is investigating  a slew of reports of skyrocketing electricity costs from consumers who recently switched to deregulated energy marketers.  The Morning Call newspaper reported that one customer said, “this is a disgusting example of price gouging thanks to the deregulation of an essential utility.”  They went on to report that one man’s February 2014 electric bill was $1,250, up from $536 in January, even though he used only slightly more power.

The bottom line? Electricity deregulation means higher bills for Michigan families and Michigan businesses.