As part of our ongoing effort to educate policymakers on emerging trends and significant issues in the electricity marketplace, Energy Fairness has released its latest report on electricity deregulation. With about a quarter of U.S. states having electricity markets that are completely or mostly deregulated, some states continue to consider deregulation with the impression that the model benefits customers.
“It’s important that lawmakers understand that electricity deregulation doesn’t benefit customers in the long run,” explains Energy Fairness Executive Director Cline Jones. “As our report details, the deregulation experiment has failed in fundamental ways in state after state.”
The report examines a number of states with competitive electricity marketplaces, including Massachusetts and Texas, showing an overall trend of higher prices, reliability issues, and widespread customer fraud.
“Years of recent evidence shows that deregulated marketplaces are replete with patterns of customer fraud and deception,” the report says.
In 2021, for example, the Massachusetts Attorney General’s office found customers who chose to go with a “competitive” supplier paid $426 million more for their power between July 2015 to June 2020 than if they had stayed with their traditional electric utility. In August 2020, one retail energy provider agreed to pay a $10 million fine because “they used unfair and deceptive sales tactics to lure more than 100,000 Massachusetts customers into expensive contracts with high electricity rates.”
“Retail deregulation is the classic solution in search of a problem,” the report explains, “particularly in states where consumers enjoy high reliability, some of the lowest retail electricity rates in the nation, and sustainable renewable energy coming online with increasing frequency.”