Deregulation works for all

To the Times: Pennsylvania lawmakers in 1996 passed legislation to deregulate the electricity sector and promote customer choice. The state was one of the nation’s first to encourage competition in the energy sphere, and as a result electricity prices in Pennsylvania decreased and are now below the national average.

Despite these benefits, we see challenges on the horizon that could threaten this situation. Due to pressure from nuclear power generators’ lobbying efforts, state policymakers around the nation have handed ratepayer-funded subsidies to nuclear plant owners in a misguided effort to keep these old, expensive plants afloat. Most recently, the Department of Energy directed the Federal Energy Regulatory Commission to use its authority to meddle with competitive markets nationwide to subsidize nuclear power. The result of such actions will mean higher electricity rates for Pennsylvania.

Years ago, the cost of generating electricity at nuclear plants was much more competitive than it is today. The emergence of low-cost energy sources such as natural gas has resulted in the creation of thousands of jobs; the investment of billions of dollars of private capital; and the construction and operation of new, clean gas power plants throughout the Commonwealth, including Dynegy’s Liberty Electric Energy Facility in Eddystone.

Dynegy owns and operates three highly efficient power plants in Pennsylvania. We pay $1.6 million in state and local taxes annually. Our Liberty facility provides more than 20 family sustaining local jobs, and produces more than enough electricity to keep the lights on in more than a half-million area homes.

To be clear, we don’t have anything against nuclear power. We just don’t think that Pennsylvania customers should be forced to pay a premium for it. Pennsylvanians paid nearly $9 billion in the previous nuclear bailout in the late 1990s. Is that something we want to repeat?

Government intervention in well-functioning energy markets does not lead to a better outcome. The federal government and Pennsylvania lawmakers should not create an unfair advantage for nuclear plants through subsidies that will punish natural gas plant owners. Instead they should look to continue the benefits realized through deregulation and let market forces continue to drive affordable electricity for our state’s consumers.