It is widely recognized that President Trump has pushed an aggressive anti-regulatory agenda on the environmental front, but this agenda often hides a second, anti-free-market battle waged in the energy context.
For decades, Congress and the Federal Energy Regulatory Commission (FERC) have worked to move the country toward competitive markets in the sale of wholesale energy – energy that generators sell to utilities, or which utilities sell to each other, and then to retail customers. Congress and FERC believed that introducing more competition into wholesale markets would reduce the cost of electricity for retail consumers because increased generation and access to generation would open up a previously limited supply. In staking out this approach, policymakers and administrators also recognized that competitive markets could encourage the construction of cleaner domestic energy resources.
In large part, this move has been successful. Deregulation of retail electricity markets has in some cases been plagued with serious problems, including higher prices for low-income consumers. But opening up wholesale electricity markets has, as anticipated, given utilities more access to a wider variety of lower-cost energy. (Much progress remains to be made in ensuring that lower wholesale prices filter through to retail consumers. This will require smarter, targeted infrastructure investments in transmission and distribution – the wires needed to deliver electricity to consumers.)
With respect to encouraging the production of cleaner, affordable domestic sources of energy, competitive markets have had a huge and ...