US Electricity Market Liberalisation

Market liberalisation and privatisation is a highly politicised matter. In the US it is reported that the drive for electricity deregulation was led by seven groups, each of which advocated changes to the system to provide the greatest benefit to their members. These groups have spent a combined $50 million lobbying lawmakers, probably more, according to their own reports to Congress. On the other“side”, an activist opposition industry has been spawned, with institutes and organisations opposing the electricity deregulation process, often funded by socio-political interests such as public sector labour unions. These have a strong interest in retaining institutions which tolerate over-manning and pay wages above the private sector. Much of the rhetoric of these bodies is highly partisan and often starts with outright condemnation, followed by a manipulation of facts or distortions to justify the position. Some of these organisations use highly emotive terminology and language in putting their view across. One notable feature of the rhetoric is the repeated demonisation of the World Bank, the IMF and other institutions which have it in their mandate to aid developing countries and are proponents of electricity market liberalisation. In reaching a balanced evaluation of the success or failure of the electricity market liberalisation process it is important to see through these manipulations and to establish facts, to help identify what works and what does not.