Guest: 'Choice and competition' threaten state’s low-cost energy relied upon by Oklahomans
By Jeff Cloud | The Oklahoman
“Electricity is a basic resource; it sustains life and must be consistently, affordably accessed,” according to guest columnist Jeff Cloud, Alliance for Secure Energy’s executive director. Chris Landsberger / The Oklahoman File
Even as the current legislative session winds down, a small interest group continues to misinform Oklahomans, lobbying for deregulating the retail energy market. As a former chair of the Oklahoma Corporation Commission, I was charged with regulating utility providers, and I implore our state leaders to critically review such misleading proposals for “choice and competition,” which inherently threaten the state’s low-cost energy relied upon by Oklahoma families and businesses alike.
More: Guest: A case for choice and competition in electricity market has grown stronger
Electricity is a basic resource; it sustains life and must be consistently, affordably accessed. If Oklahoma moved to restructure electricity, everyone would feel its effects — but seniors and those on limited incomes would feel it most. The regulated electricity sector has controlled price increases, imposed limits on rates and fuel costs, and created opportunities for all customers to engage in the process or be represented by customer advocacy groups. This isn’t guaranteed in a deregulated market.
Winter Storm Uri is one recent example. When fuel costs rose in Oklahoma, rather than put customers in danger, regulated utilities continued to provide reliable service and prevented loss of life — a reality starkly untrue in our neighboring state of Texas. When I was at the Oklahoma Corporation Commission, we imposed requirements upon Oklahoma electric utilities to better insulate their facilities against winter weather. Texas, unlike Oklahoma, lacked broad oversight and failed to sufficiently harden its power plants, the leading cause of outages during the storm according to the Texas Tribune.
Deregulated retail and wholesale energy markets left many Texans with five-figure energy bills for February 2021, and seniors and those with low incomes were impacted the most.
It’s also too soon to forget the California energy crisis in which an unregulated electric market sparked an 800% increase in wholesale prices from April 2000 to December 2000. This nearly three-year state of emergency — starting a short four years after California deregulated its energy market — caused rolling blackouts for millions and unsustainably high electric prices statewide.
Today, deregulated states continue to call on customers to conserve energy when their grids fail, with companies in Texas requesting customers set their thermostats as high as 82 degrees in the hottest months of summer.
The past few years have been difficult for Oklahoma families, and every state has felt the volatility of natural gas prices and inflation. Even so, Oklahoma offers the lowest price for electricity by a significant margin regionally, according to the most recent Electric Power Monthly report. Low prices are in part driven by our membership within the Southwest Power Pool (SPP), where competitive pricing across 14 states guarantees customers the lowest cost of reliable energy available. Only six states in the United States have a lower price for energy than Oklahoma.
Beyond household budgets, low rates drive economic development in the state. In a 2022 interview, Gov. Kevin Stitt noted, “as a state, we have the lowest cost of electricity to businesses and consumers, so, if you are a heavy electricity user, being in Oklahoma gives you a very competitive advantage.”
Look at the big picture — states with deregulated markets fall short in comparison to the proven security, affordability and reliability of a regulated state. Regulated markets have adequately served all sectors — from seniors and residents with low income to attracting new businesses and encouraging existing businesses to expand.
Deregulated states can’t say the same.
Jeff Cloud serves as the Alliance for Secure Energy’s executive director and brings to his role more than 20 years of experience in the energy sector. He was elected to the Oklahoma Corporation Commission in 2002 and served more than eight years, spending three of the years as chairman.