State utility commissions used to regulate most of the rates we pay in electric utility bills. Sales for resale between utilities are regulated by the Federal Energy Regulatory Commission (FERC). In the 1990s, however, Enron Corp successfully urged many states and the FERC to deregulate and allow “the market” (e.g., the utility sellers and buyers) to determine electric rates. As a result, no regulator, state or federal, now protects many utility ratepayers from excessive rates.
Public Citizen has strongly challenged such elimination of ratepayer protections. For example, we played a key role in getting Proposition 9 on the California ballot in 1998 to try to stop that state’s deregulation law before it could be implemented. But our efforts were no match for “Enron’s money that was used to buy ads and persuade politicians at all levels of government. But just as Enron’s business model was full of flaws, leading to its collapse and the disastrous electric market failure in California in 2000-2001, so have electric deregulation’s other promises of lower rates failed to come true.
In the Courts: Public Citizen Protecting Ratepayers
Public Citizen has been arguing in the courts, and is currently arguing in the U.S. Supreme Court, that FERC’s “market-based” rates are not consistent with the Federal Power Act, the law that requires the agency to protect consumers from excessive electric rates.