Essay on Deregulation Or Restructuring Of The Pennsylvania Electricity Sector

Essay on Deregulation Or Restructuring Of The Pennsylvania Electricity Sector

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The Process of Deregulation or Restructuring of the Pennsylvania Electricity Sector
Pennsylvania has a very long and extensive history in the electricity sector much like many other states, and it has its chapter in de-regulation and reconstruction of its electricity sector as well. Prior to December of 1996, Pennsylvania’s electricity market was being regulated and controlled by the local government; since then the market was deregulated in hopes to create a competitive market to decrease electricity prices for consumers (Electricity Watch). For why deregulation was needed at the time instead of earlier or later came down to one thing, the prices. In the Commonwealth Foundation’s article, “Electricity Restructuring and Rate Caps”, it is discussed prior to deregulation, the price of electricity was around 15% higher than the national average, which showed that the regulated generation is costly. When the Electricity Generation Customer Choice and Competition Act (HB 1509) passed in that December of 1996, its main focus was to open competition in the generation sector, where the transmission and distribution would still have strict regulations, the sole reason is that the generation was roughly 60%-80% of the electricity rate cost (1).
Much like the concerns of every consumer, prior to the regulation, primary concerns were for the prices becoming increasing higher and becoming a concern for all Pennsylvania residents. However, being the primary and seemingly only concern of the residents, the bill passed with a plan to roll out full electricity retail choice for all Pennsylvania residents by 2000. However it was not until 2009 when the Public Utilities Commission (PUC) was able to allow a complete competitive electricity market (...


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...many external and internal factors that can happen at any moment.
With many changes and challenges in front of Pennsylvania’s generating producers, PUC, legislatures, and consumers, the future for competitive markets is theirs to shape. Beyond everything else that Pennsylvania needs is the education to make the right decisions before deciding on their decision of post-deregulation of the generating companies and post rate cap expiration. Do not get this wrong, Pennsylvania is not in a crisis or in trouble, they are still paying below average electricity rates as it stands and have regulation enforced on transmission and distribution. Pennsylvania residents and legislators are on a cross road with generation-side competition and to see where it will go. The long term effects cannot be seen as it has only started, until then post-deregulation Pennsylvania is doing fine.

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