By Nick Dranias
Arizonans are facing down a speeding locomotive of utility rate hikes. This runaway train is fueled both by increasing demand for electricity and by regulation that forces utilities to generate electricity from costly sources. Worse, the current system of state-sanctioned electrical utility monopolies ties consumers to the tracks--giving them no choice but to pay whatever rates are forced upon them.It doesn't have to be this way, the free market can be unleashed to minimize the pain. Arizona can open up its electrical grid to competition. Opening the grid would let innovative entrepreneurs fulfill the demand for all types of energy, including renewable, green energy. For example, once the electricity market in Texas was restructured for competition, generation capacity increased by 35 percent and much of that was through renewable sources.
Electrical utilities should compete for your-hard earned dollar just like every other business. And when they do, your rates will stabilize and ultimately go down.
By letting entrepreneurs sell electricity from renewable sources to environmentally-minded consumers, competition shifts the costs of green policies to green consumers, keeping rates lower for everyone else. Although the Texas market is still evolving and rates have not yet fallen overall, in Britain's more mature market, a similar expansion in capacity driven by competition eventually lowered overall rates by 30 percent.
Nick Dranias holds the Goldwater Institute Clarence J. and Katherine P. Duncan chair for constitutional government and is the director of the Institute's Dorothy D. and Joseph A. Moller Center for Constitutional Government.
Goldwater Institute: Opening the Grid: How to Recharge Arizona's Electricity System for the 21st Century
Arizona Republic: Rate hike needed to afford cleaner energy, SRP says