What is Electric Restructuring/Deregulation?

Electric restructuring, also referred to as deregulation, retail competition, and retail choice, is a model under which some or all power customers can opt out of having their local utility provide electricity. Power customers who opt out of local service receive energy from an alternative energy supplier, however, the local utility is still responsible for delivering this power and servicing the customer.

Under a deregulated market, retail energy marketers are able to pick and choose which customers they want to serve. Unlike regulated utilities, they are not required to provide service to all power customers. Unregulated energy marketers often only offer the best deals to high volume customers, shifting costs onto lower volume electricity users, which includes households, farms, and small businesses. Of the 28 states that enacted electric deregulation in the early 2000s, 14 have either suspended their efforts, repealed and re-regulated, or have limited participation.

Wisconsin Benefits from a Regulated Electric Energy Market

The Customers First Coalition supports Wisconsin’s regulated electric energy market. Power customers in Wisconsin have reliable service, stable electricity rates, and effective consumer protections. Wisconsin’s electricity providers have made significant investments over the last decade to ensure reliable and affordable power for the long term.

Power customers in Wisconsin are served by locally-based providers with ties to the community, not out of state marketers and suppliers. Wisconsin’s regulatory structure encourages investment inside Wisconsin and it creates jobs. Wisconsin’s current regulated market ensures there is enough electric generating capacity to meet demand under even the most extreme conditions.

Restructuring is Harmful to Power Customers

Based on experiences in unregulated states, the removal of regulation leads to:

• Higher rates for power customers
• Less stable power supply due to the loss of generation assets
• Increased customers complaints

There is no evidence that removing regulation lowers electric rates. In fact, the average electricity rates in deregulated states continue to be about 30 percent higher than states with traditional utility regulation. Deregulated energy providers have demonstrated that they cannot be counted on to build sufficient generation to ensure reliable power for their state’s citizens and businesses.

Has Wisconsin considered electric deregulation?

Yes. In the late 1990’s Wisconsin was one of many states that examined the use of retail electric choice. After extensive study, Wisconsin’s Governor, Legislature, and Public Service Commission determined that addressing reliability and power supply adequacy was necessary. Wisconsin avoided the pitfalls of deregulation that plagued other states. Instead, Wisconsin policy makers enacted energy policies that attract investment, create jobs, improve reliability, strengthen energy conservation and efficiency, and allow for energy diversification, while preserving a system of checks and balances that protect power customers.