FirstEnergy, Ohio’s largest electric monopoly, takes issue with Ohio’s clean-energy laws and has been fighting them for years. Ohio requires the state’s biggest electric monopoly to invest in its competition and jumpstart a more competitive market for energy services. Why would they want to do that? Well, they don’t, obviously.
FirstEnergy has dominated Northern Ohio’s energy market for decades and been paid handsomely for it. Advances in technology, however, now enable us to break down the electric monopoly. We are at the cusp of a technological revolution in the way we do energy, just like the way cell phones changed telecommunications.
Direct rivalry between two competing firms has existed for very long periods of time — for over 80 years in some cities;
The rival electric utilities compete vigorously through prices and services;
Customers have gained substantial benefits from the competition, compared to cities were there are electric utility monopolies;
Contrary to natural-monopoly theory, costs are actually lower where there are two firms operating;
Contrary to natural-monopoly theory, there is no more excess capacity under competition than under monopoly in the electric utility industry;
The theory of natural monopoly fails on every count: competition exists, price wars are not "serious," there is better consumer service and lower prices with competition, competition persists for very long periods of time, and consumers themselves prefer competition to regulated monopoly; and
Any consumer satisfaction problems caused by dual power lines are considered by consumers to be less significant than the benefits from competition.
The prospect of future competition is already forcing some electric utility monopolies to cut their costs and prices. When the TVAwas faced with competition from Duke Power in 1988, it managed to hold its rates steady without an increase for the next several years.
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