Wednesday, January 6, 2010

More residents choosing alternative electric providers

20% of CT electric customers have now chosen an alternative provider for generation. you, too, can choose a better rate from this list. Read more about the trend in the article in the New Haven Register.

There has been some discussion about "re-regulating" the electric market in CT. Opponents claim that this would remove our right to choose alternatives (which is true) and further point out that the utility generation rates are higher than the alternatives. However, this does not necessarily mean that everyone's rates will go up if we eliminate the competitive market. States that have maintained the regulated monopolies have significantly lower overall rates than states like CT who have competitive markets. So your alternative provider might be saving you a penny or two over UI, but your rate is still 3 cents too high compared to the rest of the country.

The reasons for this are not 100% clear. Some may argue that we are now susceptible to market manipulation by the generation companies. Also, we now have an additional middle-man who serves as a broker between you and the generation companies. Regardless, re-regulating the market seems like an extremely difficult task. The utilities would have to buy back all the power plants that they sold off in the 90s. With only one buyer, how would they determine a fair price?