Competition has been introduced in a wide range of other formerly regulated monopoly utility markets with high fixed costs, including cable television, telephone service, airline travel, natural gas production and freight shipments over railroads. Today, each of these markets is characterized by competition, and, for the most part, the absence of government price regulation.
If we applied Michigan’s current approach to electricity requirements to other markets, the result would be a market-jarring and choice-limiting step back in time. In cable television, local cable firms would be guaranteed a 90% market share and customers wanting to switch to satellite TV or Internet streaming options would be placed on a waiting list until a spot opened up for them. AT&T landline service would also have a 90% guaranteed share of customers, and those wanting to save money by switching to an alternative telephone provider would also be forced onto a waiting list.
Many of these market restrictions in these sectors have been lifted and the result is that more people have more choices over these services than they’ve ever had before. And the quality of these services continues to improve.
There’s no reason why customers shouldn’t be able to benefit from the same type of competition when it comes to electricity. It is time to return to the electricity regulation Michigan once used from 2000 to 2008, when Michigan customers had a real choice and electricity providers competing on price and service quality to benefit of ratepayers.