This is the Cato Daily Podcast for Thursday, November 8th, 2007. I'm Caleb Brown.

A new study suggests that electricity deregulation has meant higher prices in states that have adopted it, at least in recent years.

Peter Van Doren is the editor of the Cato Institute's regulation magazine, he argues that deregulation

has largely yet to be tried.

A new study by a group called Power in the Public Interest, a group that favors traditional rate regulation for electricity,

has found that retail energy prices, electricity prices, have risen much more in states that adopted competitive pricing

than in those that have retained traditional rates set by the government.

The study is somewhat misleading because it concentrates on a time frame 1999 to the present, which is an

odd window of time to look at electricity pricing. It places deregulated markets in their worst possible context because what it, what

most states did that deregulated is they actually decrease their prices in 1998 or 99 and then froze them.

And that was called a transition period and for complicated reasons.

I won't explain why they did that, but it wasn't a market. And then in 2005 and six and in fact going forward there

are still some deregulated states that are going to end their transition period in 2008 and 9. When that transition period ends and the

rate freeze comes off, it's coming off at a time in which fuel prices for electric generation are rising quite rapidly.

As everyone knows, oil prices and coal prices and uranium prices and natural gas prices,

the fuels used to generate electricity, the prices of those fuels are rising rapidly.

So right at the time when the rate freeze was coming off and the rate freeze reflected contractual prices done in 1999, which is the time

when fuel prices were the lowest they've been in basically 25 years.

Those prices were not sustainable under any regime, be it regulated or unregulated.

Regulated states are having to deal with it as well, but not over such a short time frame.

So if you take the rate freeze off in 2005 and 6, prices went through the roof.

In Maryland, for example, where I live, prices have risen 70% basically since 2005. In a regulated environment the rate increases and rate

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