Deregulation Essay, Research Paper

Electricity is one of the largest selling commodities in the nation. In 1994, over $200 billion worth of electricity was generated and sold. In the same year, $30 billion in cattle were sold, and $6 billion in wheat changed hands.Electricity has traditionally been delivered through a tightly regulated monopoly where corporate profits were artificially established and assured by oversight panels. But now, Presidential candidates, Congressmen, Oklahoma Legislators, federal and state regulators are all discussing another way to sell power. Electricity prices will float freely in the market just like any commodity.Some consumers could reap significant savings is electricity is priced only by market forces. However, these may be mostly industrial consumers. It might prove to difficult to extend those savings to people who use electricity only in their homes, especially in rural area. National political leaders in every party seem convinced that allowing electricity prices to rise and fall in the free market will result in massive economic benefits.To keep deregulation reasonable the costly duplication of lines, poles, and meters must be avoided. Deregulation should not cause reduced reliability, the ruining of landscapes, safety hazards, or unfair pricing. Some people are making the following considerations. How will power be marketed? Will consumers find themselves getting calls at suppertime offering them kilowatts at a few pennies per hour? Will Oklahomans be forced to pay for the deregulation of generating facilities in other states because they owe billions of dollars on their nuclear power plants?Cherry picking is also a major concern. Cherry picking would work in this way. A new utility would come in and try to take business away from the home utility. These new utilities would obviously try to get the business of the industrial consumers. They would do this because they will get more money from the industrial consumers. Now that the home utility has lost the business of the industries it has to charge more for the home use. This means that families will have to pay more for their electricity. If this happens deregulation will not benefit the residential consumers of electricity. The rates of electricity in rural areas are already much higher. The end result will be that industrial consumers will get premium pricing, while rural consumers will see a significant increase in their electricity bill.

Low cost and reliable electricity is very important to the livelihood of American people. Americans consume very high amounts of electricity. About half of this is used for residential consumption. This makes the monthly electricity bill one of the largest expenses in most households. The cost of electricity has a direct effect on the price and competitiveness of all products. If electricity rates go up, all other prices will go up. If electricity prices decrease, all other prices will also decrease. Some people believe the lower priced electricity can be achieved by giving all consumers the right to choose among suppliers of electricity in a competitive market, while maintaining the reliability of service those consumers have come to expect. They also believe that competition among electricity companies will reduce the costs of electric energy to even the smallest consumers of electricity. It will also create jobs because electricity rates will decrease and companies will be able to afford more employees. It will also result in a more efficient utility industry.I feel that regulated electricity service is the best way. I don t think that there is anything wrong with the way that things are now. I feel that deregulation will cause rural consumers to pay more for their electricity and that will definitely not benefit my family. Therefore I am against deregulation.