by Jennifer Taylor, June 2007

• Introduction
• Deregulation—An overview of the issue
• Deregulation—today’s concerns
• Deregulation and electric cooperatives
• North Carolina & Electric Utility Restructuring
• Download the full article as a

Retail restructuring of the electric industry, commonly referred to as deregulation, has seen its share of ups and downs throughout the last decade. Beginning in the mid-1990s, industry leaders and legislators captured headlines as they debated whether or not to let retail electric consumers shop for power. Proponents promised competitive electric markets with lower rates, increased efficiency, new technologies and additional renewable resources. Opponents, though, questioned if effective competition would ever surface and what would happen to rates, no longer subject to review by state utility regulatory commissions.

In 1996, the Federal Energy Regulatory Commission (FERC) accelerated the process by issuing Order 888, which required publicly held utilities to provide open transmission access to support competitive electricity markets. Within a few years, New Hampshire, Rhode Island, Pennsylvania, Arizona, Illinois, New Jersey, Texas, Montana, and most notably California, among others, had enacted electric competition laws. Initially, some like Pennsylvania, experienced success with nearly 800,000 power company customers buying electricity from competitive electric generation suppliers. Others, like California, saw spectacular failures, suffering enormous price spikes and blackouts from a power grid drained dry.

Now, approximately 10 years later, all deregulated states are feeling unwelcome ramifications, prompting some to reconsider the wisdom of retail restructuring altogether.