NCPA - National Center for Policy Analysis

Electricity Deregulation Worked For Mid-Atlantic States

May 16, 2001

Those wishing to study how electricity deregulation should work might want to consider the Mid-Atlantic region of the country. Deregulation occurred there in 1997 and there are no brownouts, while consumer prices have declined.

That deregulated market includes parts of Pennsylvania, New Jersey, Delaware, Maryland, the District of Columbia and Virginia.

  • Power industry officials say the secrets to their success include the creation of a real regional market that matches supply and demand by ignoring political boundaries.
  • Instead of a one-state market, a competitive energy exchange was created that includes all of the power plants in a multistate region.
  • The grid was built upon the proven reliability of the established power system that preceded it, experts report.
  • It was also designed to entice new power producers into the market by allowing participants to have choices -- including long-term contracts of the kind that are banned in California.

Consumers have already saved more than $3 billion in Pennsylvania by paying prices for electric power that are 4.5 percent below the national average.

There are 150 new power plant projects planned for the region over the next five years that could increase electrical capacity by more than 70 percent -- keeping supply well in line with demand.

Source: Phillip G. Harris (PJM Interconnection), "Where Electricity Deregulation Works," Wall Street Journal, May 16, 2001.

For text (for WSJ subscribers)


Browse more articles on Government Issues