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Learning from Arizona’s Abrupt End to Exploring Benefits of Energy Competition

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Opening an energy market to competition isn't something that happens overnight. In fact, there really hasn't been a new energy market opened in 10 years, which is why Arizona was so exciting. The state had been debating retail competition since the late '90s.

Before the debate began to open the Arizona electricity market to competition, a pilot program was launched for the state’s largest customers. Seven customers signed up via the lottery process and Direct Energy signed two of them as customers. This was a great step forward.

As you may know, Arizona’s commissioners voted 4-1 last month against deregulating the state’s electricity market in a private meeting. The debate halted immediately. The abrupt move was very shocking, especially since they were moving forward so prudently letting every side be heard. I thought it was great that they wanted to be fully informed about the debate. The Arizona commissioners voted against competition due to an Arizona constitutional issue, not to be confused with a U.S. constitutional issue.

Bill Gates once said “It’s fine to celebrate success but it is more important to heed the lessons of failure”, and that’s exactly what I’m doing after the recent failed attempt in Arizona. One major lesson I’ve learned: get on the record at the start of the proceedings with anything and everything that might prevent the state’s commissioners from voting favorably for electricity competition.

The benefits of retail competition are plentiful and offer consumers more innovative ways to manage their energy costs/usage, including the ability to shop around to prevent a one-size-fits-all energy contract. I’m hopeful that we will see favorable market changes in Indiana, Wisconsin and maybe Florida in the future. California and Michigan want to expand their capped markets too. The outlook is bright for U.S. energy market deregulation. I think we can all learn a valuable lesson from Arizona and I hope that someday soon they will be willing to take a renewed look at bringing choice to the state.

Posted: October 11, 2013