Consumers would be hurt if electricity industry is regulated again, report says
Ohio households and businesses have saved $15 billion since 2011 because of electricity deregulation, according to a new report from a group that opposes efforts to return to regulation.
The report was written by faculty members at Cleveland State University and Ohio State University. It was financed by the Northeast Ohio Public Energy Council, a group that negotiates electricity and natural gas contracts on behalf of several hundred participating communities.
“We would say (deregulation is) working, and that customers, average moms and pops and businesses, have benefited to the tune of billions of dollars,” said Chuck Keiper, the group’s executive director.
The report arrives at a time when the state’s two largest electricity utilities, American Electric Power and FirstEnergy, have said they would like lawmakers to restructure Ohio’s market for power plants. Right now, plants compete on an open market, which the utility companies say discourages investment.
AEP and FirstEnergy did not have an immediate response to the report.
“Since 2011, a robust retail market for electricity has developed in Ohio,” the report’s executive summary says. “As a result, deregulation of electricity has saved consumers an average of $3 billion per year, for a total of $15 billion over five years.”
Among the co-authors are Andrew Thomas, an energy policy specialist at Cleveland State, and Ned Hill, an economist at Ohio State.
The electricity market has many moving parts, and pricing studies are difficult to pull off without a number of caveats.
The co-authors have narrowed the scope of their query to the market’s performance since 2011, a period when the pricing benefits of deregulation were more widely available than before. The estimated savings is based on how prices compare to what they may have been if not for the changes in state rules.