GUEST EDITORIAL: It's time to zap deregulation

July 03, 2008 02:34 pm

— Reliable evidence is mounting that the deregulation of electricity has not lived up to its promises in New York or anyplace else in the nation.
An assessment by both federal and state investigators is imperative. There’s surely a problem when after more than a decade of deregulation in New York, electricity rates have grown by 40 percent in the past 10 years. Worse, New York’s rates are 70 percent above the national average, and the third-highest in the nation.
This isn’t supposed to be happening. After all, the intent of deregulation was to promote competition, spur efficiencies and innovation and lower rates for consumers.
To the contrary, competition is virtually nonexistent and necessary infrastructure investments aren’t being made.
Yet another indicator of how badly deregulation has fared in New York is the fact that only 15 percent of New York state electricity customers purchase their electricity from alternative providers.
These findings are part of reputable reports such as one by the Association of the Bar of the City of New York. They are grist for the campaign led by the American Public Power Association to persuade the Federal Energy Regulatory Commission to conduct the first thorough reassessment of deregulation since it began in the 1990s.
Indeed, that’s a reasonable request, particularly since the highest rates and fastest increases are in states with retail deregulation. No wonder a growing number of once-deregulated states have reverted to regulation.
Since the New York Legislature has shown no interest in determining whether there’s a link between deregulation and rising electricity rates, Gov. Paterson must take the reins.
Paterson must make assessing deregulation a priority for the next legislative session. In the meantime, he should push the state Public Service Commission, which created the deregulated market on its own without legislative mandate, to begin gathering facts about outcomes.
Deregulation represents an impediment to the state and nation’s economic well-being. Mend it or end it.
— The Democrat and Chronicle of Rochester