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 1980s: Energy deregulation
 How the power business became big business

In the 1980s, energy corporations lobbied Washington to deregulate the business. Companies including Enron said the extra competition would benefit both companies and consumers.

Washington began to lift controls on who could produce energy and how it was sold.

New suppliers came to the market and competition increased. But the price of energy became more volatile in the free market.

Enron saw its chance to make money out of these fluctuations. It decided to act as middle man and guarantee stable prices - taking its own cut along the way.



 ENERGY DEREGULATION IN THE US

Before

After

Impact
Generating power Utilities owned stations and sold directly to customers Plants sold; New owners compete to sell to utilities Mixed. Critics attack removal of strategic planning
Distributing power Monopolies tightly controlled to protect consumers Utilities compete to win consumers and contracts on basis of price Enron and others created new markets focusing on energy trading
Regulating the industry Special commissions monitor prices charged to consumers Market competition theoretically to set prices, but some controls remain Mixed political reaction; some legislators opposed unhindered markets
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