David Cay Johnston has an article in the NYT this morning that reports that the price of electricity for industrial users has risen more rapidly in states that deregulated their electricity markets than in those that largely maintained regulated pricing. There are some disputes about measurement, as the article notes, but the possibility that this could be true is really striking. The regulatory policy that states had in place was deliberately to designed to have a cross subsidy, with industrial users paying more so that residential and commercial users could pay less. One expected result of deregulation would be that this cross-subsidy would be eliminating, which would mean that electricity prices for residential and commercial users would rise relative to prices for industrial users. It would be quite striking, if it turns out that even industrial users did not benefit from deregulation.
--Dean Baker
