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High cost of low regulation

Government regulation is the bugbear of conservatives and businesses who complain it adds to their cost of doing business. But sometimes a little government regulation is a good thing. Just ask some people in Texas who are being hammered with thousands of dollars in extra power costs as a result of the recent winter storm and cold snap.

Texas is one of the states that allows people to select the company from which they purchase their electric power. In most places, you buy from the utility that serves your area. But in Texas, you can choose a different company from your neighbor and pay a different price, even though the power comes from the same grid.

A lot of people have been buying power through Griddy, a service that allows its customers to buy power at the wholesale rate. In good weather, that’s often a bargain, a couple of cents per kilowatt hour. But during the storm, the cost of wholesale power was driven by demand up to about $9 per kilowatt hour. Griddy warned its customers to switch to a different provider, but those that didn’t wound up getting bills for thousands of dollars.

In a lot of states, government utility commissions control how much a utility can charge its customers, to protect the customers from the kind of volatility seen in Texas utility bills.

The people who had been enjoying the low wholesale electric prices are now clamoring for government to DO something. They think it’s wrong to allow a utility to charge whatever it wants in difficult times, just to make money.

Where’s the regulation when you need it?

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