Lack of competition hurting British customers

Electricity deregulation has already proven a powerful tool in several states around the U.S., but some places have had a harder time encouraging competition between electricity providers.

A new report from British think tank IPPR North shows that competition is lacking in the U.K., where the country has implemented electricity deregulation but only a few large electricity providers dominate the market.

The report notes that the gap between the most efficient and the least efficient electricity providers in the country has actually grown in recent years, from an extra 90 percent spent per customer to an extra 113 percent. That only leads to higher electricity rates for customers and the report suggests that 2.5 percent savings could mean lower electricity bills by around £1.9 billion, or more than $3 billion.

"Most of the Big Six energy companies are continuing to overcharge their existing customers to subsidise cheap offers," the report claims. "As a result some families are paying as much as £330 ($535) more than their neighbours to use the same amount of energy from the same company."

For the U.S., this suggests that states need to adopt as open a policy of electricity deregulation as possible to prevent a few companies from dominating the market.