Update On Pennsylvania’s Electricity Restructuring

Five years ago, Pennsylvania was one of the policy leaders in pursuing electricity restructuring. My assessment of the Pennsylvania approach has been that although it has some flaws (such as regulated retail price caps that phase out over 10, count ’em, 10, years), that they struck a good balance in their transition to more market-based policy approaches.

This article from yesterday’s Philadelphia Enquirer reaches a similar conclusion. The reduction in retail rates has been a boon to customers, and even though they are capped, they are capped at a level that still attracted supplier entry, to a certain extent. In fact, this precise point is listed as an area of restructuring that needs more work:

Alternative power suppliers have found it tough to make money here, because they can’t offer a better price than the utilities’ capped rates. The price caps are artificially saving consumers’ money, but are simultaneously deterring competition.

And the growth of choices, including green power, is a great thing.

But I am frustrated at the fact that the state’s consumer advocate has such a narrow-minded view of demand response and market-based retail pricing. Oh, we have a lot of work to do …