Handbook on Affordability
“To ensure that the energy sector can meet the demand of new industries without soaring costs for households, a similar liberalization agenda is needed to remove barriers to new energy supply. At the federal level, improving energy affordability requires restoring predictable permitting and regulation that will allow new investments to flourish. At the state level, it requires expanding the bounds of competition and removing supply constraints. None of this depends on discovering new fuels or inventing new machines: It depends on allowing markets to function without undue interference.”
Maximize dynamic competition in electricity service. Monopoly utility regulation creates perverse incentives to drive up costs and shifts risk to utility customers. Privately financed, contract-based electricity systems can serve customers separately from incumbent utilities. This approach—outlined in a recent Cato briefing paper and labeled “Consumer-Regulated Electricity”—would protect existing ratepayers, accelerate supply, and attract new industries without subsidies. The states of Ohio, New Hampshire, Utah, and Oklahoma are at the forefront of this trend, which continues to gain steam after the American Legislative Exchange Council approved model legislation.”
