Cui bono?

Beginning Monday, the average electric bill for the average household in Delaware will go up 59 percent. That works out to more than $620 a year.

This huge spike is the result of electricity deregulation, which was introduced as a measure that would lower the cost for consumers. Deregulation was celebrated as a triumph over the costly inefficiencies of "big government."

This claim was, it turns out, a con. This is not surprising. It's always a con when questions of the proper role and function of government are reduced to the simplistic cartoon of Big vs. Small. Whenever you hear someone railing against "big government," keep an eye on your wallet.

I work in Delaware, but I don't live there. That means I'm not facing this 59 percent increase in my utility bill, but it also means that I have a longish commute, and the cost of that drive to work has increased by a lot more than 59 percent over the past year.

Delawareans, of course, are also paying these higher gas prices. They were already angry about that before they learned about this sudden increase in their electric bills, and now they're even angrier.

Much of that anger is directed at Delmarva Power/Conectiv, but there's still plenty left over for the state government, which is increasingly viewed as more interested in the interests of business than in the interests of the public.

A "throw the bums out" storm cloud is gathering over Delaware's legislature this election year. No incumbent seems safe — maybe not even state Sen. George Bunting, who cast the sole vote against deregulation back in 1999.

The governor who signed electricity deregulation into law was Tom Carper, who is now a U.S. senator. Jeff Bullock, then-Gov. Carper's chief of staff in 1999, explains some of the rationale for the deregulation vote:

This is an issue that people are looking back at now with better than 20-20 hindsight. … In 1999, the Enron and WorldCom scandals hadn't happened yet. California hadn't happened yet. Most people thought deregulation and free-market competition would be good for consumers. … We were trying to be out there on the cutting edge.

That's from an article titled "Deregulation was a victory for lobbyists." Lobbyists for the utility, for the power suppliers and power wholesalers, power retailers, and all the other layers of middlemen that deregulation added to the power supply chain in the name of increased efficiency. So nevermind the Bullock claim that this was all done in the interest of what "would be good for consumers."

I'm neither an economist nor an energy speculator, and I can't even pretend to understand how this supposed "free market" in electrons is supposed to work. I've tried, but I can't puzzle out the difference between the supposed market-efficiencies of legitimate energy wholesalers like Delmarva Power and the shell-game subsidiaries of Enron.

But the "free market" introduced by electricity deregulation in the First State seems neither free nor a market. The majority of Delaware households face a virtual monopoly from a single unregulated electricity provider — a company that does not, itself, generate a single kilowatt of electricity but that is instead a middleman buying low from generators and selling high to consumers. That's not what free-market advocates of electricity deregulation had in mind, but it very well may be what the utility lobbyists had in mind when they embraced the language of free markets to promote the legislation that brought about this strange state of affairs.

Some additional reading:

* "Energy Deregulation Comes Home to Roost," by Steven Mufson of The Washington Post. Mufson traces the deregulation debacle in Maryland:

More than half of Maryland households … still face sharp hikes in their electricity bills. Maryland politicians, many of whom have received contributions from the utility, face voter ire in an election year.

And notes that deregulation has resulted in an "80 percent increase for customers of Texas's biggest utility."

* "Rising rates? It's not just deregulation" by Steven Church of The (Del.) News Journal. Church notes that some of the 59 percent increase facing Delaware households is the result of factors other than deregulation, such as increased oil and gas prices. But he concludes that deregulation is responsible for some of that increase, and that it clearly has done the opposite of what its advocates claimed it would — reduce prices for consumers:

Deregulation by itself didn't cause the rate increase, but it did create the conditions that made residents and small businesses vulnerable to wild spikes in the price of natural gas. … The cost of generating power at all plants has gone up since 1999 because of inflation and the higher cost of coal and natural gas. But if Delmarva still operated under old regulations, customers probably would have faced a series of smaller increases that, taken together, would have been lower than the 59 percent hike.

* Consumer Reports was way ahead of the game on deregulation, noting back in 2002 that "It was supposed to cut prices, expand choice, enhance service — improve your life. So how come you're not smiling?" Here's a link to a .pdf file of their article "Deregulated," describing "how deregulation has affected consumers and what they can do to better protect themselves."

That's the key phrase: "protect themselves." Because that is the literal meaning of deregulation — the government abdicating its responsibility to protect the public.