Why are so many recently privatised energy companies so poorly managed?

Is it to do with the maintenance of a previously nationalised infrastructure which causes problems, or is it the fact that it’s basically a license to print money as the consumer usually has very little alternative to switch from a conglomerate of suppliers who regularly fix prices between them?

I feel something is going on but I’m not able to articulate or visualise properly what it actually is.

Have they done poorly? Most power utilities in the United States were started as, and remained, entirely private. There are certain things they have to do in accordance with the law due to having a natural monopoly. There are different experiments about which of these regulations can or should be repealed, or applied in different ways, but they’re generally still present in some form.

In some countries, this has not been the case. Some electrical programs were started by governments or just nationalized. The overall trend in recent years has been towards increasing privatization, but slowly.

First, there are fifty states and fifty models for deregulating the electric utilities industries if that’s what the OP is talking about. That’s because each of the fifty states had its own unique rules for regulating the electric utilities. It’s a mess.

The problem in New York State is that the Public Service Commission (every state has some equivalent but mostly with different names) made a major change around the turn of the century. It opened the delivery of electricity (and gas, which is a complication I’m ignoring) to anyone. Anyone meaning ESCO’s. Energy Services Companies. This was going to introduce a golden age in which the ESCOs would find all sorts of new players entering the industry to create cheap (possibly renewable) electricity, make use of smart meters, charge different prices for off-peak use, and generally be dot-coms in wonderfulness.

We remember the dot-com bust. Why would we think ESCOs would work out differently? There is no cheaper way to make electricity. There is no cheaper way to deliver electricity. The heavy state subsidies of green energy and renewables made pricing fake and unsustainable. And the old utilities are still around and can do anything the ESCOs could at lower costs, because they are larger and have the advantage of economies of scale. Also, they aren’t crooks, like some of the ESCOs inevitably turned out to be.

In the end, people who left their utilities to get electricity from ESCOs spent more money than those who didn’t. This was entirely predictable. It was, in fact, predicted by the utilities but nobody wanted to listen to them because they were the bad guys.

BTW, there is no nationalized infrastructure. I don’t even know what that might mean. There is no price fixing either. That’s because all utilities, including the ESCOs, have their profit margins determined by their state PSCs. There are, of course, people who think that we should all get free electricity from the sun and can’t understand why utilities are needed at all. It’s as insane as having climate deniers running national policy. Oops. They are.

Here in Maine, the production and distribution of electricity are done by separate companies. CMP in Southern and Central Maine, and Emera in the Northern part of the state have monopolies on distribution in their areas. There are many various companies that own power plants and sell electricity to these two companies.

I need to nitpick myself. In New York, the ESCOs have to get approval for their rate structures from the PSC but that doesn’t necessarily mean their profit margins are fixed in the way old-line utilities are. It mostly means they wind up charging more to get to the same place. Utilities still deliver all energy.

What You Should Know Before Choosing An Energy Supplier, from the PSC.