
Many of my republican buddies continue to defend the high cost of electricity deregulation by blaming the failure on the fluctuating cost of natural gas. Unfortunately the argument doesn't hold water, but they really don't seem to care. Maybe this will help. Here is a comparison between what we had pre-deregulation and what we have now.
Pre-deregulation:Only one company sold electricity, in our area it was Houston Lighting and Power. HLP also generated the electricity. They maintain the "grid" and provided service to consumers.
- Consumers would sign up with HLP
- Consumers would pay about 8 cents a kWh
- When they moved, consumers would cancel their service.
Post-deregulationMany companies sell electricity, but none generate it or maintain the grid. In our area there is one that maintains the grid, Centerpoint Energy. They do not sell electricity to consumers instead many middle men buy from Centerpoint then resells the service.
- Consumer can sign up with any of the various middle men.
- If they have internet access, they can "shop around" to find the lowest rate, based upon the time of year. If a consumer requested service in the summer, then they would lock in at a higher rate than if they if requested service during the winter. There is no "negotiating" for a lower rate. There is competition between resellers during that time frame only.
- After their one year contract is over, the consumer must once again, "shop around" to find yet another company, resign with their current service, or they would automatically be put on a month to month plan with their current provider. (Those who never signed up with a company was automatically put on a month to month plan with wild fluctuations in prices.)
- Consumers on a month to month plan would pay the lowest rates (relatively) during the winter months and some of the highests rates (as high as 24 cents per kWh) during the summer.
- If a consumer moves prior to the conclusion of their contract, they would have to pay a disconnection fee ranging from $79 to over $300.
- If their middle man would go out of business (and many have), the consumer is put on the rolls of the "provider of last choice" with extremely high rates no matter what time of the year. Consumers would, once again, have to find a new provider with rates depending upon the time of year.
- Consumers pay anywhere from 10 cents per kWh to 24 cents depending upon the time of year the service is needed and the cost of resources determined by the industry.
In conclusion:Before deregulation we had low rates, reliable energy, and a long term open ended contract. We usually had to call HLP twice, once to sign up, and once to cancel.
After deregulation we have much higher rates and a complicated, closed end contract that fluctuates on a month to month basis providing competition based upon what month a consumer needs service. It is a service that must be maintained on a yearly basis.
So for those with you who are sporting an uncomfortable grin defending those who are putting it to you day after day after day, enjoy the 4th of July. A day when we celebrate our freedom from those who put it to us, day after day, after day.
Forecast for the area is HOT!