Deregulation Déjà Vu

August 08, 2013

If the talk about electricity deregulation sounds familiar, it’s because we’ve been down this road before. Then we stopped, made a U-turn and headed back.

Now that the Arizona Corporation Commission (ACC) is once again exploring the issue, let’s take a look back at last time.

In the mid-1990s, the ACC began the move toward deregulation in Arizona. By the end of the decade, the plans were in place. California was going through the process at roughly the same time, about a year-and-a-half ahead of Arizona. By 2000, California’s struggles with deregulation were well publicized – market manipulation, rolling blackouts and price spikes. Seeing what happened elsewhere, Arizona wisely halted its move to deregulation.

When all was said and done, APS alone had spent just under $48 million to prepare to comply with the pending changes. And that was just for phase one. Fortunately, there was no phase two.

The nail in the deregulation coffin came in 2004, when the Arizona Court of Appeals ruled that the planned deregulation rules violated the state’s constitution. That ruling remains in effect today.