Experts: Deregulation Did Not Cut Industrial Rates
01/20/2006

Industrial customers of electric utilities have not seen their rates lowered as a result of deregulation and, in some cases, deregulation has created costs that have raised rates, said three experts at the Carnegie Mellon Electricity Industry Center in comments to a federal task force examining deregulation, according to the Associated Press.

“There is no evidence that the price or rate of change of the price (for industrial customers) has been any different, whether in restructured states or not,” said Jay Apt, professor of engineering and public policy at Carnegie Mellon University in Pittsburgh.

The 23-page report, which reviewed the prices for industrial consumers in the District of Columbia and 19 states that passed deregulation laws, said that any future deregulation efforts should stop for now.

Despite the rise in industrial rates in Montana, a spokesman for the state’s industrial consumers said they support the change and like buying on the unregulated market, according to the Associated Press. “They do feel they get better service and they get a tailored product,” said the spokesman.

The study did not examine the effect of deregulation on homeowners because residential rates are almost always capped or reduced for a certain period. Apt expects residential rates to increase dramatically when the caps come off.

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