Carol, I don't think deregulation is the answer. I've simply been discussing some of my opinions as to why it doesn't seem to be working in certain areas.

Government subsidies can occur regardless of a regulated or unregulated environment. In general, I believe in the long term, most susidies are not good.

That being said, specifically with regard to the electric utility industry, it is important to understand that it works in accordance with the laws of physics. Generation stations and transmission lines are built to compliment each other; as such a program that seeks to unbundle these two aspects of the business must address these complimentary issues. I've yet to see a regulator do this. With this regard, Midchuck Caddy comment is right on.

Another aspect of this industry is that there are indeed benefits of economies of scale. A large centrally located power station can produce energy at a $/kwh rate much less than smaller dispersed units. That being said, when electric utilities could still build these types of facilities, there was no way these dispersed sources (like windmills) could economically compete. Hence the utilities' lack of interest. Note also that these regulated electric utilities were not owned by gas, oil or coal producers, so they really didn't have an incentive to discriminate against other technologies.

An interesting aspect of this deregulation mess and the success of power plant opponents is to drive electricity prices up to levels where these dispersed resources appear to be more affordable.

Ed