Deregulation = Misnomer

To many  people, “deregulation” has become a derogatory term, and opponents of competition in electricity markets frequently employ it that way. But to use the term “deregulated” to describe restructured competitive electricity markets is inaccurate and misleading – it’s a total misnomer.  Even with the end of monopoly-based price regulation, the electric industry remains one of the most highly regulated, monitored and controlled industries in the country. For example, the Federal Energy Regulatory Commission (FERC) has a vigorous monitoring and enforcement program and can levy fines of up to $1 million per day per violation for market manipulation or violations of commission rules.    Utilities must get approval to issue securities or buy and sell assets, are subject to regular reporting requirements, and now there are very strict and comprehensive reliability rules as well. Organized wholesale power markets overseen by FERC-regulated regional transmission organizations (RTOs) have additional safeguards to ensure fair competitive market operations, reliable supplies and reasonable prices.   In addition to the constant FERC monitoring, these markets are monitored in real time by independent professional market monitors who regularly assess the competitiveness of markets and make recommendations to FERC. William Massey | June 19, 2009