Is electric deregulation working for you?
Fifteen years after Ohio deregulated the electrical utility industry, the benefits are hard to find.
Deregulation. Consumer choice. Restructuring. No matter what you call it, the 4.8 million customers of Ohio’s largest electric utilities have been free to pick their power supplier since 2001.
On the state’s Energy Choice Ohio website, consumers can compare suppliers on price, generation source and length of contract. Or they can stay with the rate their utility gives them. As of June, about 2.6 million residential, commercial and industrial consumers had switched to a supplier other than their electric utility.
But are consumers better off a decade and a half since Ohio deregulated the electric industry?
Consumer advocates, electric utilities and the Public Utilities Commission of Ohio say consumers pay lower prices when electric generators compete for their business. Ohioans, however, paid 11 percent more for electricity last year than they did in 2001 when adjusting for inflation.
And recent proposals by utility companies threaten to make their customers pay power plant costs, even if those customers have picked another supplier.
To understand deregulation, you have to understand how electricity is made and gets to consumers. The power grid has three main parts: generation, transmission and distribution.
An electron’s journey to a light bulb or appliance starts at a generation plant. Coal, natural gas, uranium, wind, sunbeams or some other “fuel” is used to make electricity. The electricity flows from the generation plant on large transmission lines — those tall steel towers you see traversing local cornfields. The transmission lines eventually connect to a distribution system of wires and poles that carry electricity to homes and businesses.