Competition Is Good For Electricity Consumers
Competition is the driving engine at the core of our free-market system. Competitive markets produce the most effective results in the economy, spurring innovation, driving down consumer costs, and providing consumers a broader variety of services. That was true in the 1980s with the deregulation of the telecom, airline, and natural gas sectors, and it’s still true today.
The rapid pace of innovation is delivering new digital technologies that are changing the way we receive and use energy. Unfortunately, the traditional anticompetitive model of an electric utility with a monopoly over both the production and delivery of power has not kept up with the speed of change and is standing in the way of a truly modern electricity system.
The Energy Choice Coalition is a nonprofit organization dedicated to accelerating the modernization of the electricity sector by opening power generation and electric retailing to true competition. The Energy Choice Coalition educates the public on the benefits of market-driven competition and promotes policies at the state and federal levels that break down barriers to private investment.
Today, consumers have the freedom to choose their electricity service provider in 13 states and the District of Columbia. But a fully competitive market - Texas having the freest market of all the states - is still not available everywhere, and incentives built into current federal regulations are holding back the transition to a 21st Century power system.
As new technologies accelerate changes in the way we generate, manage, and use electricity, consumers should be in the driver’s seat. Electricity provides the foundation of our modern lives, but the absence of competition limits innovation and denies end-users more advanced and cleaner energy options and technologies.
As regulators and policymakers debate the pros and cons of pricing and market reforms, carbon-emission restrictions, renewable energy mandates, storage, advanced metering, distributed energy resources, and other changes affecting electricity markets, the Energy Choice Coalition is here to remind them that competitive markets are the most effective way to give consumers what they want – abundant, affordable electricity that is reliable, secure, and clean.
The utility watchdog Energy and Policy Institute highlights a bill introduced last week in Virginia that would prohibit the utilities Dominion Energy and Appalachian Power from charging customers for their political activities.
The bill, HB 792, would bar Virginia’s investor-owned electric utilities from charging their customers for their dues to trade associations, lobbying government officials, advertising, and other efforts to influence public opinion, charitable giving, and litigation to challenge regulations or laws. Current law in Virginia only bans utilities from recovering the costs of advertising.
Dominion Energy and Appalachian Power would still be able to conduct all of those activities, but they would have to fund them from money they would otherwise return to investors as profit, rather than baking them into customers’ monthly bills.
The bill also would require the utilities to file reports annually to allow regulators and the public to ensure that they are following the law, and would apply financial penalties to any utilities who break the new rules.
The Energy Choice Coalition hosted a webinar on Wednesday on the consumer benefits of competition in electricity markets. The discussion is based around a recent R Street Institute paper, Electric Paradigms: Competitive Structures Benefit Consumers, and its recommendations for states to pursue market reforms that increase competition at all levels of electricity markets. Panelists included R Street Institute scholar Michael Giberson, Sunnova’s Meghan Nutting, Northwestern University’s Institute for Regulatory Law & Economics Director Lynne Kiesling, and ECC Director Robert Dillon.
A federal grand jury on Monday indicted the former chair of the Public Utilities Commission of Ohio on 11 counts related to bribery and embezzlement.
The indictment claims Sam Randazzo accepted a $4.3 million bribe in exchange for helping FirstEnergy pass House Bill 6, the 2019 energy law at the center of a wide-ranging federal bribery probe that has already resulted in former speaker of the Ohio House Larry Householder serving a 20-year prison sentence. Householder was convicted in March 2023 by a federal jury of racketeering conspiracy.
House Bill 6 charged Ohio electricity customers a fee to bail out two nuclear plants owned by the FirstEnergy and slashed incentives for renewables and energy efficiency. Ratepayers continue to subsidize a pair of coal plants owned by FirstEnergy and several other utilities because of House Bill 6, according to the Cleveland Plain Dealer.
The watchdog organization the Checks & Balances Project has requested the identities of the Ohio Public Utilities Commission staff members who recommended issuing the protective order that declared publicly available information to be trade secrets in the audit conducted into the details of Ohio’s HB6 law.
The redaction included the identity of the company auditors accused of “overcharging” the Ohio Valley Electric Corp.’s Clifty Creek power plant for coal and other financial information about the utility – details are publicly available in filings to the U.S. Energy Information Administration and on the utility’s website.
The PUCO’s request for the protective order said the “financial information contained in the Audit Reports that is highly sensitive in nature.”
On Wednesday, December 6 at 11 a.m. EST, join us for a conversation on competition in electricity markets. Competition provides economic, reliability, environmental, and governance benefits. Yet 18 states still use the traditional regulatory model that allows large vertically integrated utilities to hold a monopoly in their service areas. Another 19 states allow wholesale competition but still allow regulated monopolies to serve all or most retail customers. Just 13 states and Washington D.C. allow competition at the retail and wholesale levels. While many states are considering increasing competition in their wholesale markets, small consumers in retail markets are still being left behind. Click here to register for this webinar at 11 a.m. EST on Wednesday, December 6.
The Energy and Policy Institute recently published the following report detailing how utility campaign giving nears $500K as Michigan lawmakers weigh energy bills.
Michigan utility giants DTE Energy and Consumers Energy have given state lawmakers nearly half a million dollars in campaign contributions this year, according to new state disclosures that come amid worries that the same legislators will weaken key bills to accelerate the transition to clean energy to appease the utilities.
Political action committees (or PACs) tied to DTE and Consumers have channeled a total of $479,450 to campaign accounts tied to legislators, Governor Gretchen Whitmer, and broader party funds between January 1 and October 20. The filings, released this week, show funds affiliated with 119 of 148 state legislators – 80% of the body – have taken utility money this year. House and Senate energy committee members and chairs are notable beneficiaries, including some who promised to usher in a new era of utility accountability after widespread power outages earlier this year.
Patty Durand, founder of Cool Planet Solutions and past president of the Smart Energy Consumer Collaborative writes in The Roanoke Times that Virginia's focus on nuclear energy is misguided.
“We live in amazing times to experience the benefits of technology, not only with smartphones, computers and medicine, but especially for energy. The number of advancements in how energy is produced and delivered and stored is mind-boggling. Things like data analytics, virtual power plants and distributed energy mean the electricity grid is able to decarbonize affordably and rapidly, and it means people can be engaged in ways never before possible.”
“Instead of leaning into these exciting developments, we know from several Roanoke Times articles and essays published over the past year that Virginia’s Gov. Glenn Youngkin is proposing to build a small modular nuclear reactor (SMR) in Southwest Virginia as part of his Virginia Energy Plan. The plan seeks to increase nuclear energy with a stated objective to make Virginia the world’s leading nuclear innovation hub. This is unfortunate because there is nothing innovative about nuclear power.” ….
Tyler Adams, state director for Conservatives for Clean Energy Georgia, writes in the Valdosta Daily Times that developing more community solar in Georgia can boost grid reliability while adhering to conservative political principles. Adams writes that growing energy demand is an opportunity for decarbonization through increased renewable energy deployment.
The Ohio Capital Journal documents the ongoing investigation into the massive bribery scandal in Ohio involving FirstEnergy and state legislative leaders.
According to the Ohio Capital Journal, five have been charged and four have been convicted in the bribery and money-laundering scandal and there are now more signs that the federal criminal investigation continues.
In court documents filed in a separate case in late November, a special master said that a major player in the conspiracy — Akron-based FirstEnergy — continues to cooperate with federal prosecutors. The same documents order the major beneficiary of the conspiracy, a former FirstEnergy subsidiary, to do more to cooperate in a federal class-action suit.
Politico published a story this week on the struggles of the clean energy industry despite the record infusion of funding from President Biden’s Inflation Reduction Act.
Inflation, rising interest rates and unfriendly regulatory environments in some states are kneecapping solar, wind and other clean energy projects. Several Republican-controlled states (and some Democratic ones) are rolling back consumer benefits for rooftop solar installations, threatening Biden’s goal of a carbon-free electric grid by 2035, writes Jason Plautz. And, as Benjamin Storrow reports, progressive states like New York are struggling to meet their own carbon reduction targets amid a deteriorating economic environment.
The full story is worth you time. Check it out here.
The Atlanta Journal-Constitution has a commentary in today’s paper from Georgia resident Patty Durand urging the state to restructure its utility regulatory system to keep up with the rapid change of technology.
We live in amazing times to experience the benefits of technology, not only with smartphones, computers and medicine, but especially for energy.
The number of advancements in how energy is produced and delivered and stored is mind-boggling. Things like data analytics, virtual power plants, grid edge services and distributed energy mean the electricity grid is able to decarbonize affordably and rapidly and it means people can be engaged in ways never before possible.
Yet none of that is seen in recent announcements from Georgia Power as reported in The Atlanta Journal-Constitution, in which the utility claims that large amounts of new capacity that only it can produce are required to meet a capacity crunch. Georgia Power is a monopoly utility that is guaranteed a healthy profit for building power plants, an antiquated business model that needs to change. Of course they will claim the need to build more capacity: that is how they make money.
The Energy and Policy Institute reports that Michigan legislators are failing to keep their transparency pledge to voters.
DTE Energy has given $176,000 to Michigan lawmakers’ campaigns and related funds since a February ice storm caused lengthy power outages, a reoccurring event that stoked widespread backlash from DTE customers. The spending comes as Democrats attempt to pass climate and consumer protection bills, raising questions over whether they will deliver on promises that some have made to rein in the utility.
Michigan’s House and Senate energy committees held a pair of hearings in March where members grilled utility executives and relayed the frustrations of residents whose lives were upended by days-long DTE outages. But despite blasting the outages as “unconscionable” seven months ago, legislators appear to have softened their push for utility accountability – and roughly 100 of them have taken DTE money since then, state campaign finance records show
The California Public Utilities Commission (CPUC) has postponed a decision on whether to reduce rooftop-solar incentives for users with multiple meters until Nov. 2. The delay comes after local clean energy advocates complained the move would reduce incentives for adopting solar and set back the state’s clean energy goals.
Reimagine Power, a local energy advocacy group, helped galvanize opposition from utility customers across the state, including agricultural organizations, renters’ rights groups, school districts and environmental advocates.
“The extension is likely the result of all the public pressure, hundreds and hundreds of personal communications, op-eds and editorials that the CPUC — and Governor who appoints the commissioners — received from everyone under the sun, that the decision must be amended,” Igor Tregub, Reimagine’s Strategic Partnership Director, told local media outlets. “I think the decision to postpone the meeting for three weeks is a positive one. Of course, I don’t know what their final decision will be.”
The Florida Supreme Court ruled on Sept. 28 that the state’s Public Service Commission failed to justify why the largest utility rate increase in state history for Florida Power & Light was in the public interest and how it was allowed by law. The court sent the case back to the commission in a a 4-2 decision in the case of Floridians Against Increased Rates, Inc. v. Gary F. Clark, etc., et al.
Floridians Against Increased Rates, Florida Rising and others, previously challenged a decision made by the Public Service Commission to approve a settlement agreement between Florida Power and Light and other interested parties providing for a rate increase. Floridians Against Increased Rates and Florida Rising had argued the Public Service Commission’s decision did not comply with Florida law resulting in “unfair and discriminatory customer rates.”
In its Sept. 28 decision, the Florida Supreme Court ordered the commission to justify its approval of Florida Power and Light's $4.868 billion rate increase settlement, instructing the commission to “do the job with which the Legislature has tasked it” and explain why the increase in customer bills paired with charging customers for a higher rate of profit as agreed to in the settlement was “fair, just, and reasonable” for Floridians.
The Energy Choice Coalition recently joined more than 30 organizations representing commercial, industrial, and residential consumers and public interest groups in calling on the U.S. Department of Energy (DOE) and Congress to support state efforts to launch and expand organized wholesale electricity markets.
The coalition sent a letter on November 19 to Energy Secretary Jennifer Granholm asking the Energy Department to support state efforts to develop new competitive wholesale electricity markets and improve existing ones.
As more states consider creating regional organized wholesale markets to integrate more dispatchable energy resources (DERs) like wind and solar and increase the flexibility of the overall electricity system, DOE should make every effort to ensure that state energy and regulatory officials and consumers have the necessary tools and technical assistance to needed to adopt a more competitive wholesale market structure.