As Ohio lawmakers debate a plan to deregulate the state's electric industry, they should look at other states that are further along to see whether residential and small business customers are saving money. Opening the electricity market to competition holds the promise of lower bills and new technologies for cleaner electricity. The trick is in ensuring that the plan creates competition for all electric customers, not just big industrial users. After a city council or town meeting vote, the community establishes a buying group. All customers are in the buying group unless they choose to opt-out and buy their electricity from another supplier at any time.
Communities can act on their own or form larger buying groups with other communities.
Power suppliers are able to offer the best prices to communities because they can offer a large, stable number of customers, so the supplier can avoid an expensive advertising and telemarketing campaigns. Twenty communities in Cape Cod have banded together to buy electricity at cheaper rates. The California law muzzled competition by creating hurdles for communities that want to form buying groups. Communities cannot afford marketing campaigns to get consumers to sign up one by one to join a community buying group. Potential competitors, including energy giant Enron, are not marketing to individual residential customers in California and other states, including Massachusetts.