Friday, July 09, 2004

Electricity price regulation

The government is intervening in the electricity market to require all electricity retailers to offer an alternative pricing plan with a low fixed daily charge. This is a good thing.

The way the right is reacting, you'd think this was an introduction of Muldoon-style price controls. Hardly. The electricity companies are free to set the usage charge component of the plan, and given the way these things work, it will be higher. And of course they're free to offer other pricing plans (as they already do). This isn't price control, it's mandating consumer choice. Isn't that supposed to be what the market is all about?