Tuesday, November 6, 2007

Competition drives UP electricity prices


The New York Times has revealed a new study which shows that electricity prices in states with deregulated markets have risen "much more" than those without competitive energy markets. The same data was referenced in a separate study by the Electric Power Supply Association to indicate a 15% price increase (which they labeled "slight") in deregulated states over regulated states. I think to truly compare the effects of deregulation, one would have to somehow take into account other factors such as regional fuel prices, congestion effects and then compare these effects to all states included in the study. That said, I still think the results shown are probably valid.

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