Deregulating utilities would be bad for Oklahomans

Your Turn

Rep. Garry Mize

Guest columnist

A group of third-party energy marketers, or 'middlemen,' is attempting to manufacture a problem for Oklahoma.

These middlemen are the founders of a new group called Alliance for Electrical Restructuring in Oklahoma (AERO) that is seeking to deregulate Oklahoma’s electric industry. Recently, AERO’s executive director, Mike Boyd, wrote an op-ed alleging Oklahoma utilities Oklahoma Gas and Electric Co. (OG&E) and Public Service Corp. of Oklahoma (PSO) 'wildly overpaid for the natural gas' during Winter Storm Uri in February 2021.

That is incredibly rich, since Boyd failed to acknowledge the energy marketers funding AERO benefitted the most from costs incurred during Winter Storm Uri. In fact, AERO’s efforts are nothing more than an attempt to create new profit opportunities for these marketers while removing the protection afforded to customers through Oklahoma’s current regulatory system.

AERO claims this effort will drive competition and lower prices, but that has not been the case in other states. Deregulated states have some of the most expensive power in the country, with energy prices far exceeding Oklahoma’s prices. Our utility rates compare very favorably with other parts of the country, and most importantly, our electric companies provide excellent reliability statewide.

The idea of shifting to an 'open marketplace' for retail electric service is not new. It’s been studied, considered and rejected by Oklahomans for decades because it leads to reliability problems and price increases for customers.

Just ask our neighbors in Texas, where power supply scarcity and grid failure left thousands without power during a major ice storm and with sky high electric bills. That system failure was directly related to Texas’ deregulated market. During this hot summer, Texans have been encouraged to set thermostats at 82 degrees to avoid blackouts.

Additionally, AERO is advocating energy choice to some commercial and industrial customers. Utilities simply cannot deregulate one or two customer segments. Doing so would mean the costs of operating and maintaining power generation, transmission and distribution to all customers would shift to residential customers, causing rates to skyrocket for families.

Oklahomans already enjoy the benefits of competition through the Southwest Power Pool (SPP), the regional transmission organization that operates a wholesale competitive power market. Simply put: Oklahomans benefit from SPP dispatching only the lowest cost energy from across the region and with the accountability that comes with retail price regulation by the Oklahoma Corporation Commission.

Research conducted by CHS & Associates last year shows only 11% of likely voters favor deregulation of the state’s utility system. Oklahoma’s regulated model has served Oklahoma utility customers well for more than 100 years, leaving us with incredibly reliable service and some of the lowest energy rates in the country.

There’s a reason not a single state in our union has moved toward a deregulated marketplace for their electricity system in recent years, and many of those who have are now on record as regretting their decision. Oklahoma should stay the course with its current regulatory model and avoid the mistakes made by others.

Rep. Garry Mize is the chair of the House Utilities Committee at the Oklahoma House of Representatives.