Arizona opinion: Retail electric competition merits new look

The following is the opinion and analysis of the writer:

Michael Giberson

In Arizona, consumers can choose their cars, homes, phone providers and where they shop for food. You cannot shop for electricity. Don’t like the latest rate hike? You’re stuck with the local monopoly. Want 100% renewable power? The monopoly says no. Prefer fossil fuels instead? No. But with record-setting heat driving heavy AC use and two major electric companies asking the Arizona Corporation Commission to stick consumers with higher rates, many wonder why they cannot choose their electricity supply.In fact, until recently, state law directed regulators to create rules for electric competition. Utility regulators never followed through, and last year, conservative lawmakers, purported defenders of free markets, stripped pro-competition language from state law at the request of the monopolies. Some lawmakers said they needed to kill the old law so they could take a fresh look at competition, but they seem to have lost their interest.

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With more hot weather and rate hikes looming, it’s time for that fresh look. Several states allow customers to choose their own electric supplier and have for decades. A new report on retail electric competition written by a former state regulator summarizes both the good and bad effects of competition. Arizonans should read it.The good news is that competition puts pressure on electric supply companies to keep costs down and that competitive markets help consumers who want to support renewable power. In addition, consumers get a much wider range of supply opportunities, with offers ranging from “free nights and weekends,” to fixed bills to special deals for customers with solar panels or home battery systems.The bad part is that some competitive suppliers have engaged in misleading and abusive sales tactics. Also, many states have not done well educating consumers about their new opportunities. Even after 20 years of allowing consumer choice, some people do not know they can choose their own electric supplier.In other states, these same abusive sales tactics and consumer confusion have resulted in some officials calling for a return to monopoly, but the author says the flaws can be readily fixed. The last 20 years of experience shows that with the right foundation, competition works for consumers.Monopolists commonly make three arguments: Competition didn’t work in California, competition will make the system unreliable, and electric rates will skyrocket. These arguments are either misleading or wrong.California’s early attempt at retail competition failed, but no other state copied California’s approach and no other state had a similar failure. Arizona would not adopt that discredited design, so California’s failure is irrelevant.It is also not true that retail electric competition will make electric power service more unreliable. Most power outages come from damage to distribution wires from storms, like the recent outages in Tucson caused by a monsoon. Even …

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