Consumers Have Choice For Many Service Providers. Not So With Electricity
September 10, 2025
Marketplace
Severin Borenstein, Energy Institute Faculty Director, breaks down on how the business of utilities naturally leads to monopolies on Marketplace.
‘Severin Borenstein at the University of Califonia, Berkeley, said there are also mechanical reasons it’s easier for just one company to make or deliver electricity: powerlines…‘If somebody is already running wires down your street, it’s both economically inefficient and just a bad business idea to say we’re going to spend a lot of money to do exactly what they’re doing already.’ he said. The high cost of upgrading and repairing that aging infrastructure — which is especially vulnerable to increasingly severe weather — is one of many factors causing high utility bills this year. Whereas in other industries, competition can lead to lower prices for customers, that hasn’t yet been the case with utilities. Due to the infrastructure required, Borenstein said a retail market for electricity isn’t likely anytime soon. ‘Basically, we need wires that go to everybody’s house or company and as long as that’s the case we’re going to have monopoly utilities,’ he said.”
Photo: marketplace.org