Regulation vs. Freedom

Just a little over a month ago, Anna and I closed on our very first home. We still had a month before we had to vacate the apartment, giving us the luxury of being able to take our time getting the new house ready by making some repairs (fixing a leaking toilet, replacing the kitchen sink faucet, etc.) and getting the utilities turned on before we actually moved in.

In 1998, the state of Georgia deregulated the natural gas utility service. Before that, the government had decreed that Atlanta Gas Light was the one and only provider of natural gas service for the state. It was illegal to compete with them and the government had extensive control of the service as well. Atlanta Gas Light could not change it's prices without approval from the state and even many of the day-to-day operations of the company were controlled by the government. When deregulation went into effect, however, the principles of free market economics came into play.

Initially there were 28 applications to become natural gas marketers, 19 of which met the basic criteria set by the state. Twelve of these certified marketers actually ended up providing natural gas to customers. Seven of these grabbed a large enough of the market share to be considered top contenders. Just one year later, the free market force of competition meant there were only five marketers left standing. In order to increase their market share and beat out the competition, these five companies had put money, time, and effort into figuring out ways they could decrease their costs of providing the service while also increasing the quality of that service so that they could lower their prices, keep their current customers more than happy with the quality of service and successfully market themselves to new customers, all while still remaining profitable. As a result, natural gas prices in Georgia plummeted, the quality of service skyrocketed, and the overall number of interruptions in service dropped as well. The marketers knew that since the customer could freely choose between them, they had to become more and more efficient to stay competitive. When Atlanta Gas Light held the government sanctioned monopoly for this service, there was no incentive to become more efficient, no need to market themselves, no reason to increase the quality of service--after all, why should they? If you wanted natural gas service you had no other choice but to use them.

Fast forward to today. Knowing that Georgia deregulated natural gas oh those many years ago, I went online looking for the best price and level of service I could find from the many marketers and I found one: Fireside Natural Gas. They not only had the best price available, $0.77 per therm, but they have consistently beat out the competition month-in and month-out for about 18 months now. They don't require a deposit if your credit is decent and even if it's not the deposit is not overly burdensome (less than $100). They also have quite the reputation for great service and I was sold! Only one problem. When I called them to start service with them they informed me that they would love to have me as a customer but that I lived in an area that was still regulated.

I couldn't believe it. I wondered how this was possible. They went on to explain that when the state decided to deregulate, there were a few local municipalities that decided that they would pass laws putting back into place the regulation that the state had done away with. In our case this meant that the neighboring city of Buford had setup its own natural gas utility and that my city of Dacula had worked out a deal with them to be the sole provider of natural gas for us. This means that our price is now $0.96 per therm and all customers (even those with perfect credit) are required to pay a $300.00 deposit upfront. If you live in the city of Dacula, you have no choice. It doesn't matter if Fireside, SCANA, Gas South, Gas Key, and Stream Energy all have much lower prices and do not require such a burdensome (if any at all) deposit. I am forced, by law, to use the city of Buford's gas if i want hot water year round and a heated home in the winter.

Regulation is the opposite of Freedom. Anytime the government attempts to provide what the free market should, freedom is restricted. And inevitably it does so at gun-point. Think I'm exaggerating? Ask yourself this, if someone wanted to provide natural gas service to me other than the city of Buford in defiance of the law and attempted to do so, what would happen? The company would be taken to court and fined. What would happen if the company then refused to pay that fine? The owners or the CEO, etc, would be arrested and taken to jail. But what if the owners resisted arrest? Guns would eventually be drawn and shots fired. You may say, "But that's because they resisted arrest, not because they provided natural gas to me." The answer to that is simple: Had they not been restricted from providing natural gas in the first place, they would have never been in a position to resist arrest. Anything the government does is always implicitly backed up by the threat and use of force. It's no wonder that government does nothing efficiently, they don't have to when everything they do is backed up by guns.

Our country is one of the freest in the world. But it is far from being as free as it should be. Government touches every aspect of our lives. Yet most Americans can more easily name the finalists on American Idol than can name their Congressman and Senators. If you are not aware who your elected officials are, check out this link and become informed. Make sure you think carefully about who you vote for and put into office those who champion freedom over government and regulation.