Policies: Deregulation

An Introduction to Restructuring of Electricity Markets

Published October 2013

(download full brief)

The essentials

  • The electric utility industry has in the past typically been a monopoly with a few utilities in a particular geographical area that generate, transmit and distribute electricity.
  • Recently, the Arizona Corporation Commission (ACC) had opened up discussions to decide if Arizona should restructure the electricity market and allow competition (also referred to as retail competition or deregulation) or maintain its current regulated structure.
  • Restructuring the Arizona electricity market would have allowed consumers to choose among a variety of energy suppliers in a competitive market based on prices and services.
  • The stages of generation of power, transmission and distribution would be independently operated by competing power companies.
  • On September 11, 2013, the ACC voted 4-1 to end the discussion on retail electric competition in Arizona, reasoning that there were several constitutional hurdles.
  • However, the ACC kept open the potential for discussion about other changes to Arizona electricity markets.
  • Note: this brief uses the terms restructuring and deregulating interchangeably.