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COMMENTARY: With deregulation, Virginians can expect higher electric bills

COMMENTARY: With deregulation, Virginians can expect higher electric bills

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YOU WOULD think that a political campaign to raise people’s electric bills would be unpopular. That assumption would be wrong. Because in Virginia and across America, there is a movement to raise peoples’ electric bills by “deregulating” how states provide electricity.

In layman’s terms, a “regulated” electricity market (like the one that currently exists in Virginia) means that electric companies produce and deliver electricity to customers. These electric companies are highly regulated by state government experts who control how much the power companies can charge their customers.

Despite the success of this arrangement between power company, government and customer, there are forces that want to deregulate Virginia’s market and allow third-party suppliers to sell electricity to customers.

Understand: a third-party supplier is a company that buys power from electric companies, and then marks it up and sells it.

But in deregulated states, people who sign up to buy electricity from third-party suppliers are paying significantly higher electric bills than they would have if they just stuck with the local power company.

In neighboring Maryland, Parris Glendenning, the former governor who signed legislation allowing the state to deregulate, says that decision was his biggest policy mistake. There, deregulation led to Marylanders paying more for electricity, not less.

A Democrat, Glendenning said that salespeople working for shady third-party suppliers would even go to Maryland welfare agencies and stand outside, targeting people going in to get assistance to pay their electric bills. This was clearly an attempt to take advantage of less sophisticated customers, and prey on their economic insecurity.

In Massachusetts, the state attorney general recently released a report which found that “in the last five years, individual residential customers who received their electricity from competitive suppliers paid $426 million more on their bills than they would have paid if they had stayed with their utility companies.”

The report also found that these suppliers “continue to charge low-income residents and residents in communities of color higher rates for their electricity.”

A Wall Street Journal analysis of U.S. Energy Information Administration data reported that “U.S. consumers who signed up with retail energy companies that emerged from deregulation paid $19.2 billion more than they would have if they’d stuck with incumbent utilities from 2010 through 2019.”

The Journal added that in nearly every state where third-party suppliers operate, “they have charged more than their incumbent utilities in each of the five years from 2015 through 2019.”

In Virginia, the effort to deregulate the state is being led by a group called Clean Virginia. The group claims deregulation will create more clean energy. But unlike the evidence which exists that deregulation raises rates, Clean Virginia provides no research on their website that deregulation leads to increased use of renewables.

In fact, a majority of investment in clean energy is in regulated states where the government requires utilities to invest in clean energy production.

Investor-owned electric companies, including those operating in regulated states like Virginia, are leaders in clean energy development across America. These utilities have reduced their carbon emissions 45 percent below 2005 levels, compared to the industry as a whole, which has decreased emissions by only 33 percent.

Lastly, the ultimate expression of failed deregulation is Texas, where the state actually disconnected itself from the national power grid to create its own marketplace, where customers could benefit from third- party suppliers negotiating lower prices.

Guess what? In the last decade, Texans paid $12.6 billion more than they would have without deregulation. And when hit with winter storm Uri earlier this year, the lack of government oversight led to massive power outages that cost over 100 lives.

The only thing deregulation will guarantee Virginians is aggressive salespeople using high-pressure tactics appearing at their doors, or calling them on their phones with false promises of lower electric bills.

Gary C. Meltz is the executive director of Power for Tomorrow.

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