The case for energy deregulation

In the last decade, several states have adopted energy deregulation laws that have created a robust and competitive electricity market, and with more laws being developed to support such a cause, the benefits of deregulation could extend to more states.

According to the San Francisco Chronicle, California is one state that could significantly benefit from similar laws that have been passed in states such as Illinois, Maryland, Pennsylvania, New Jersey, New York and Texas. These states are seeing huge leaps in renewable energy integration and greater use of energy efficient technologies. Homeowners in these regions now also have the freedom to choose their electricity providers, giving them enhanced flexibility when it comes to payment methods and other services.

Data from the U.S. Energy Information Administration further support energy deregulation. As of 2011, competitive electricity has made up nearly 1 in 5 kilowatt-hours across the country, serving 13.3 million customers. The total amount of electricity sold through retail energy providers rose to 685 million megawatt-hours as of last year.

Further demonstrating how California could benefit from deregulation, when electric rates per kWh are compared, the U.S. nominal rate stood at 10.36 cents, while California rate was at 13.79 cents, the seventh-highest in the country.