Former Oklahoma Corporation Commissioner Warns Deregulating Electric Utilities Would Increase Rates, citing New York Times-led research
OKLAHOMA CITY — (January 6, 2023) — As Oklahoma lawmakers prepare for the 2023 legislative
session to begin next month, former Corporation Commissioner Jeff Cloud is asking that one New York
Times article makes its way onto the reading lists of the state’s elected officials. In the article, “Why Are
Energy Prices So High? Some Experts Blame Deregulation”, the Times conducted original research to find
that although energy costs are rising nationwide, costs in Oklahoma and the 14 other states with classic
regulated utility models are rising more slowly than in the 35 states including Texas, California and New
York that have “broken apart the generation, transmission and retail distribution of energy into separate
businesses,” also known as deregulation or electric restructuring.
“This timely original research is coming weeks before legislators are expected to consider a bill that a
niche group of proponents have promised will ‘introduce choice’ for electric customers, and create
competition between electric providers,” Cloud said. “Make no mistake — these more recent proposals
are consistent with the historic deregulation argument that Oklahomans wisely avoided in 2001 and
2002, when I first ran for the Corporation Commission. The Times report makes plain what Oklahoma
policy makers have understood for two decades — regulators must have the ability to oversee utility
spending and rates, because we know these costs will come back to ratepayers.”
According to the article, residents living in deregulated markets pay an average of $40 more per month
for electricity than customers in states where individual utilities “control most or all parts of the grid.”
Experts contributing to the report cite several reasons for these higher costs, including less oversight on
the investments utilities make to the grid, less oversight on rates and higher wholesale prices in order to
enable profits to new energy suppliers, which operate independently of utility companies. Currently in
Oklahoma, single utilities manage most parts of the grid and are responsible for producing and
delivering electricity to homes and businesses, and the Oklahoma Corporation Commission regulates
each investment in power generation, transmission and distribution, determining what costs ratepayers
should bear.
“In other deregulated markets, we have seen that decoupling transmission and distribution creates
unnecessary duplication that drives up costs for customers and makes the electric system in those states
less reliable” Cloud said.
Cloud is the Executive Director of the Alliance for Secure Energy, a nonprofit organization created to
ensure Oklahomans have secure, affordable and reliable electric energy now and in the future. One of
Cloud’s top priorities is to defend against policies such as deregulation, which stands to threaten the
affordability and reliability of electricity in Oklahoma.
“The effort to deregulate Oklahoma is led by a niche group called the Alliance for the Electrical
Restructuring in Oklahoma (AERO) that includes gas marketers and other interests who stand to profit
from these proposed changes to Oklahoma law,” Cloud said. “These interests want all of the rewards
without any of the operating responsibilities and related risks. I’m here to ask Oklahomans who are
rightfully concerned by increasing energy costs not to support policy that limits the Corporation
Commission’s checks and balances and their ability to protect you.”
About the Alliance for Secure Energy
The Alliance for Secure Energy is a nonprofit organization created to ensure Oklahomans have secure,
affordable and reliable electric energy now and in the future. For Oklahoma communities and
economies to thrive, electricity providers and policymakers must work together to promote reliable,
modernized infrastructure and innovative services. The Alliance for Secure Energy supports policies and
regulations that impact infrastructure expansion and upgrades, new electric generation, environmental
stewardship, economic development, sustainability and affordability. Together, we will advance policies
that balance the important goals of keeping energy prices affordable and ensuring utilities remain
financially secure so they can continue to invest in infrastructure and provide reliable service.