Ideas and concepts cycle back from time to time, even the dangerous ones. That appears to be the case as the Arizona Corporation Commission takes another look at deregulation of electricity.
The idea, which has support among commissioners, would allow new suppliers to compete with existing utilities for generation of power, giving consumers a choice. The utilities like Arizona Public Service Co. and Salt River Project still would maintain the power lines that connect to customers. This is called retail competition, or “re-regulation” by proponents.
Competition generally is good in commerce, but when it comes to changing the regulated monopoly situation that exists with utilities, maybe not. The difference with utilities is that service requires lines that connect to every customer and maintenance of those lines. Proponents say competition would drive down prices, but it might lead to less stability and reliability of service as well.
The commission actually studied this issue in the 1990s and approved rules for competition in 1999 and 2000. Then California had an energy crisis that was triggered by just this concept, leading to rolling blackouts and a big backlash by residents against state government. And California was not the only place affected by utility changes. Jobs were lost and customers and stockholders were hurt elsewhere as well.
According to The Arizona Republic, the idea being considered would be for business customers, but an effect on residential customers is feared. The state Residential Utility Consumer Office says customers in other states that have deregulated ended up paying more. And AARP, a powerful organization representing seniors, says it is opposed because of bad experiences by consumers in other states.
The ACC seems to be advancing the concept by moving toward new rules that would allow it. Because it would affect large utilities so much, we’re sure to hear much more. However, utilities would not be the only ones affected. Consumers would too, and they should study the issue and make themselves heard.