New CSU study found that consumers saved nearly $15 billion over last 5 years
The deregulation of electricity generation in the state of Ohio has led to increased choice and reduced costs for consumers, according to a new study released by Cleveland State University’s Maxine Goodman Levin College of Urban Affairs. The report found that consumers in Ohio saved nearly $15 billion dollars over the last five years as a result of deregulation. The findings also indicate that continued deregulation of the electricity generation market will lead to an additional $15 billion in savings over the next five years.
“Electricity deregulation reduces monopoly control over electricity costs, opening up generation to market conditions, and thereby increasing efficiency and innovation and lowering costs for consumers,” says Andrew Thomas, co-author of the study and executive-in-residence with Levin’s Energy Policy Center. “Our data shows that in Ohio this policy has led to significant benefits both for consumers and the state as a whole. Moving forward, continued deregulation of the industry will lead to additional savings while also enhancing the development of energy efficiency, demand response and other programs which benefit consumers and communities across the state.”
Thomas notes that deregulation benefitted not just retail electricity shoppers, but even those who defaulted into the Standard Service Offer. This is due to the fact that the SSO now uses a market-based auction rather than cost-based accounting to determine the Price to Compare. The team also analyzed how states across the Midwest that had implemented deregulation compared to states that still had fully regulated systems. In fact, the deregulated states of Ohio, Pennsylvania and Illinois have outperformed Midwest neighbors Michigan, Indiana and Wisconsin in constraining consumer electricity costs.
“When implemented properly, electricity deregulation has been proven to be a successful policy tool for assisting governments in controlling energy costs and increasing energy system innovation,” Thomas adds.
The study was conducted in partnership with Ohio State University’s John Glenn College of Public Affairs and was funded by the Northeast Ohio Public Energy Council.
Read the report.