ï¿½You canï¿½t kill a bad idea,ï¿½ says a co-worker of mine.
With electric utility deregulation, he seems to be right.
You might have thought that with the spectacular disasters of California rate spikes and brownouts and the Enron corruption and bankruptcy, the nails would be securely sealing the coffin.
But thereï¿½s more.
In some states where deregulation has been tried, utilities have used their economic freedom to raise pricesï¿½not exactly the promised bargain for consumers. One industrial customer said, ï¿½Deregulation is a colossal failure.ï¿½
So youï¿½d think the idea would have been dropped in a hole and covered with dirt.
You would be wrong.
Deregulation began decades ago, allegedly with the idea that in a free market, competition produces the best deals for customers. The real idea was to roll up higher profits for companies. It worked so well with airlines and cable TV (hah, hah), that the people who chase scandalous profits centered their crosshairs on the electric utility industry.
It was a bad idea from the start. It turns out there are good reasons for the rules. We have our occasional complaints, but our nationï¿½s electricity system basically delivers incredible reliability at affordable and stable prices.
In other words, it ainï¿½t broke.
But some persist in trying to fix it. A few years ago, deregulators tried to sneak a plan into federal rules that would lower rates in high-cost states, by raising rates where they are lower than averageï¿½like Kentucky (see ï¿½Electrical Storm,ï¿½ Kentucky Living, November 2003). That ambush got shouted down.
But theyï¿½re baaack.
Like zombies rising from the grave, the deregulators are now setting up outfits called Regional Transmission Organizations. The announced intent is to better control the price and flow of electricity. Or it could be the latest effort to take decision-making away from places like Kentucky.
In Kentucky, the good guys are still winning. In 1997, when most states were moving toward some form of deregulating their electric utilities, Kentuckyï¿½s electric cooperatives formally opposed that kind of industry restructuring. The legislature agreed to wait and see whether deregulation would work in other states.
Weï¿½re still waiting. In the meantime, Kentucky continues to have the lowest average residential rate of any state.