Do competitive markets work? It seems like we need to justify the deregulation of energy markets everyday! If you ask our clients, who have been seeing year over year savings due to energy deregulation throughout North America, the answer would have to be an outstanding YES!

Leila Vespoli, Executive Vice President and General Counsel of FirstEnergy Corp., recently spoke to the Ohio House of Representatives Public Utilities Committee on this issue. She testified about what Ohio has done right, in creating an effective structure for providing customers with lower prices for electric generation, and where they could do more to maintain and expand competitive markets for electricity in the years ahead. In her testimony, she cited three key points.

First, with respect to electric generation, competitive markets work. They deliver the lowest price over the long-term to customers, and the proof is undeniable. Moreover, they will continue to ensure adequate and affordable supplies of generation for Ohio’s future – which, in my mind, is the only meaningful definition of Ohio’s energy security.

Second, measures that restrict customer shopping or subsidize one electric generator over another are throw-backs to monopoly regulation. Such efforts that pick “winners” and “losers” in the energy market would create obstacles to private investment in generation and increase prices for customers.

Third, governmental aggregation is the jewel of Senate Bill 3 – a proven way to deliver significant savings on electric generation to large numbers of residential and small business customers. Toward that end, we should pursue every effort to extend this channel to more Ohioans.

She states that in one proposal a utility is seeking to be allowed to effectively cap shopping by limiting the amount of market-priced capacity available to suppliers over the next three years. Once these caps are reached, third-party suppliers would be forced to buy capacity from the company at prices that would be more than four times the market value. In her opinion and ours, this is simply an attempt to restrict shopping and to force customers to pay the utility’s above-market rate.

You can read Leila’s full testimony by clicking here.