$620/ Month Electric Bills Under Deregulation

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Ratepayers Could Own All the Plants at These Prices

According to new calculations by the non-profit Foundation for Taxpayer and Consumer Rights, residential electric bills in California will soar to an average $620/month if the state’s utilities are allowed to pass through current energy prices to ratepayers. The average weighted price in the electricity market is $1182.02/megawatt-hour ($1.18/kilowatt-hour), which is a 3900% increase over prices at this time last year. An average residential consumer, who uses 500 kilowatts per month, paid between $45 and $60 for electricity in December in recent years.

“Unless deregulation is reversed and immediate action taken, consumers will pay electric bills that are ten times higher than ever before,” said Doug Heller, a consumer advocate with the Foundation for Taxpayer and Consumer Rights (FTCR). “If our elected officials bow to the utility companies, ratepayers will also be forced to pay in additional $6 to $20 billion to bail out the utilities for the deregulation disaster.”

FTCR calculations also found that if the current prices last for eight days, the amount spent on energy would have been enough to purchase all the privately owned generation plants in the state. According to information supplied by the California Power Exchange, the state’s electricity market, power companies are charging $543.8 million for tomorrow’s energy supply. (More energy will also be bought tomorrow to fill the remainder of the day’s demand, which could amount to additional hundreds of millions of dollars.) Eight days of these prices equals $4.34 billion dollars spent on electricity, slightly more than the $4,339,050,000 that private, unregulated power companies paid for a majority of the state’s power plants since 1997.

“For the amount that is being spent on buying electricity, we could have bought all the plants from these profiteering corporations and put this power under public control,” said Heller.

FTCR and others have noted that the high prices and dangerously tight supply of electricity in recent days is a result of market manipulation by the unregulated, private power companies that provide California with electricity. The 1996 deregulation law required the utilities to sell their power plants to ostensibly create competition among power suppliers. Instead, the companies have gouged Californians by withholding energy and driving prices to all time highs.

FTCR has called on Governor Davis to take over plants that are not operating, but could be, and bring them back on-line to ensure the reliability of the system. The group has also called for public ownership of power plants to ensure that there will be reliable affordable energy available to California’s ratepayers.


Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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