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Even with public utilities competition works best

May 2, 2012

Since we are seeing some personnel changes at the Arizona Corporation Commission it might be timely to revisit the issue of deregulation. The monopoly concept for dealing with public utilities never made any economic sense (it was always promoted by the utilities themselves, not the consumers) but it makes even less sense today. While it may be difficult to amend the Arizona Constitution to eliminate the regulation of utility rates and services (as we saw a couple of years ago), there is one thing that can be easily changed by the Arizona Legislature and that is to eliminate the service territory monopoly (which is not in the constitution). What would happen to prices if APS and SRP were allowed to compete along their common borders? Many are not aware that there is even an area of SRP service territory where APS provides the service and rebates money to consumers in that area when APS rates are higher than SRP. Why not just let them compete?

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