New research from Ohio State suggests that electricity deregulation has introduced “middleman” marketers who often drive prices up instead of down. (The Conversation)
After analyzing a decade of data across millions of records, researchers found that 72.1% of third-party electricity offers were more expensive than the utility’s default rate. When savings did exist, they were tiny (5–10%) compared to the typical price increases (25–30%).
Why? Marketers don't typically set prices based on wholesale costs. Instead, they peg their rates to the utility's "default" price—which is itself inflated by uncompetitive auctions. The study found that adding just three more bidders to these default auctions could lower rates by 18% to 23%.