Make the Carolinas More Competitive

Last year South Carolina passed the bipartisan Energy Freedom Act, which was an excellent start to opening up the Carolina power markets to greater competition and renewable energy. But it was just the first step.

South Carolina and North Carolina, along with Virginia and Arizona, are among the top states looking to empower their consumers with the freedom to select where their electricity comes from by knocking down barriers to private-sector participation in their power markets.

At a press conference Thursday, Kevin Hart, Executive Director of the Carolina Utility Customers Association, along with South Carolina State Senators Tom Davis and Wes Climer, and North Carolina State Representative Larry Strickland announced more energy choice reforms were on the way.

Lawmakers from both states are working on legislation to allow more consumer choice in the region’s electricity market and greater competition against the incumbent monopoly utility, Duke Energy.

One bill will fund a study to look at a regional transmission organization (RTO) to determine the benefits of having an independent operator oversee the transmission system.

Proponents of consumer energy choice point out that the current electric utility model hasn’t kept up with changing technology. It may have made sense for a utility to have a monopoly on generating and delivering power 80 years ago. But that New Deal-era structure no longer fits a power market with cheap, clean renewable energy and digital devices that allow consumers to control their electricity use from the palm of their hands.

“What we envision, in this stakeholder process, is an opportunity to consider what else is out there,” said South Carolina State Senator Wes Climer. “My suspicion is, as we have seen in every other sector of the economy, is that increasing competition, increasing consumer choice, will lead to lower prices for consumers, better delivery, and better outcomes for ratepayers across the board.”

We think the Carolinas are on to something. Despite the recent setback in Florida, consumers want the right to choose their energy and service providers without having to pay for legacy power plants that no longer fit their needs or values. Companies competing for those customers have a natural incentive to hold down costs and provide better service. The experiences of states like Texas with real-time pricing demonstrate how competition improves efficiency and drives innovation in the market place, while keeping consumer prices low. Keep an eye on the Carolinas.