22 November 2005 - The chairman of US utility PPL Corporation said Monday that deregulation has resulted in significant benefits for American electricity users and that policymakers should continue to encourage the use of market forces to reduce electricity prices and to promote construction of new generating facilities.
"Electricity deregulation in the U.S. has been highly successful, saving consumers more than $30bn compared to what they would have paid under a regulated system," said William F. Hecht, chairman and chief executive officer of PPL. "The job, however, is not yet complete. To ensure reliable electricity supplies for the future, it is imperative that we finish what we have started."
PPL was an early proponent of competitive electricity markets and was instrumental in the development of Pennsylvania's Customer Choice program, which is often cited as one the best deregulation plans in the country.
"Under a competitive wholesale framework, the risks associated with investments in new generation are borne by generation companies' shareholders, rather than by ratepayers, as was the case under a regulated model," said Hecht.
"Competitive markets will deliver lower prices to consumers than would be the case under regulation and will send the proper price signals to encourage development of new sources of generation," he said.
Policymakers, he said, need to signal that the country recognizes the benefits of competitive electricity markets and is ready to move forward. Hecht said an absence of appropriate price signals in the marketplace will affect the reliability of the nation's energy supply.
"Policymakers should recommit themselves to allowing market forces to send proper price signals for generation and state their intent to reject or end measures that interfere with or prevent appropriate market price signals. Policymakers should permit and encourage reliance on market forces to establish prices in all workably competitive markets - even during conditions of scarcity," the company said in a filing with the Federal Energy Regulatory Commission (FERC).