Louisiana risks higher electricity rates amid partial deregulation push

In recent months, the Louisiana Public Service Commission (LPSC) has been reviewing proposals to deregulate or restructure the electricity market in the state. Experience from other states shows that full deregulation often causes customers to face higher electricity rates. For instance, in Michigan, partial deregulation has led to significant reliability issues and cost burdens being passed on to consumers. Louisiana's considerations seem to echo this trend, with industrial customers and energy companies advocating for changes that might not benefit the average consumer, but could create administrative challenges for the LPSC. Notably, the push for partial deregulation is primarily driven by energy companies rather than industrial customers like petrochemical plants. These energy companies would gain the ability to build power generation facilities that compete with regulated utilities, potentially increasing the electricity costs charged to average consumers. While industrial plants might save some costs with customized power facilities, the broader consumer base would still rely on state-provided infrastructure for backup. Moreover, there are concerns that introducing a deregulated environment similar to Texas could lead to rising prices during peak demand periods. This may result in some customers paying exorbitant rates—up to 40 times more than average rates, especially during high demand times—placing an unfair burden on Louisiana's residents. The potential for grid reliability issues adds another layer to the already tricky dynamics of the deregulation debate. In conclusion, Louisiana's consideration of partial deregulation should be approached with caution. Many believe that allowing such proposals could lead to a future where average consumers suffer, while industrial customers benefit from customized energy solutions, creating an unequal energy marketplace. Given the negative outcomes experienced in other regions and the current challenges facing the LPSC, the state should be wary of following a similar path.