Competition for electricity customers has started in many states and is planned in still more. Customer choice leads to lower rates and is the wave of the future.

Regulated utilities have begun the wholesale dumping of their wasteful customer efficiency programs. In the industry this was known as “getting trash off the books.”

Regulated utilities rightly feared unregulated competitors would not add frivolous costs to their services. Ratepayers enjoyed stable and even declining rates as the utilities were forced to make rational decisions in a quasi-market environment.

But the retail market concept was flawed. Rather than evolving through the market process, political dictates prevailed in designing the structure.

The result was a Frankenstein’s monster. It looked like the real thing but lacked the essentials necessary for a real market.

ENTREPRENEURS WERE not allowed to develop alternative delivery systems. The scheme can be called guaranteed return on over-valued assets.

Yet on the wholesale level, time-sensitive pricing became the norm and made electricity a commodity that is exchanged like other commodities using marginal cost pricing.

This rationality spread to some sectors of the retail market and brought much-needed customer feedback to utilities.

Government-orchestrated retail competition in electricity largely failed. With that failure came the return of regulatory-mandated, utility-administered wasteful efficiency programs. This time the utilities justified this as countering global warming.

In a typical utility program, $6 is collected for giving away low-energy light bulbs that a consumer can buy for less than $1.50.

The utilities ask to recover hundreds of millions of dollars without verifying they achieved any energy savings.

THE BAD NEWS for consumers has not ended with the rebirth of these demandside management programs.

Another high-cost nuclear plant is underway in Georgia. The lesson that should have been learned from the last round of nuclear plant building – such as the failed SCANA-Santee Cooper fiasco in SC – is that utilities should be subjected to market conditions and their attendant risks.

Instead, we see utilities go to state regulators and lawmakers for guaranteed recovery on investments with no spending limits.

GREEN ENERGY mandates drive up electricity costs and it will get worse.

Corporate users try to be politically correct and adopt high-sounding green goals.

End-user energy management includes press releases filled with platitudes.

One-size-fits-all energy measures are being promoted to obtain certification of a commitment to save the earth. Energy saving programs costs have increased. Dubious environmental effects are included with hard energy saving numbers to justify politically correct investments and practices.

The best energy policy is no energy policy.

Competition should replace regulation. Supply and demand with unfettered competition will lead to wise customer choices without government interference.

Mr. Clarkson is an energy consultant and CEO of Resource Supply Management.