In contrast, Pennsylvania, where deregulation has been more successful than in California, requires most of its utilities to surrender some of their customers. The Legislature froze customer prices at 1996 levels, well above what the utilities were then paying for electricity. Wayne, the president of UtiliSource, learned the hard way. He was peddling electricity in California in early 1997, before the state created the Power Exchange. But the birth of the exchange caused the death of his deal, Wayne said.
Retailers say the state protects the utilities in subtler but no less damaging ways.
They need all the encouragement we can give them. In a recent meeting with reporters and editors at The Times, Enron Chief Executive Kenneth Lay suggested that the framers of deregulation kept market forces pinned down in the retail sector. You can't do anything right now. Only when it came to businesses and big institutions such as universities were retailers able to make a dent in the market. The small price reductions they offered translated into huge savings for those large users of electricity.