WASHINGTON, DC – The Energy Choice Coalition today joins the Electricity Consumers Resource Council (ELCON), Public Citizen and other consumer advocates and pro-market groups in calling on the U.S. Senate Committee on Energy and Natural Resources and the U.S. House Committee on Energy and Commerce to direct the U.S. Government Accountability Office (GAO) to study the cost and reliability of electricity in the United States and the impacts on consumers of Regional Transmission Organizations (RTOs).
Federally regulated RTOs are non-profits created in the 1990s to increase competition in electricity markets dominated by vertically integrated utilities by ensuring non-discriminatory access to the transmission grid by customers and suppliers. Today, there are increasing calls to expand RTOs, which currently cover about half the states and about two-thirds of total U.S. power demand, but federal regulators have not conducted a comprehensive review of the data on how RTOs are performing for more than 12 years.
In the letter sent to Congress today, we urge Congress to seek a new review to measure the cost and reliability impacts of wholesale markets to ensure that competition in electricity markets is benefiting consumers at all levels. Specifically, we ask that the study pay particular attention to the effects of the following trends:
RTO expansion, both voluntary and mandatory, is under consideration at the state, regional, and federal levels as a way to increase access to clean energy;
State and federal policies, as well as private sector demand from individuals and corporations, are driving changes in the resource mix that will require significant increases in spending on transmission infrastructure and changes to market management, including accurate and timely pricing signals; and
The electrification of the broader economy is increasing pressure on the power system to satisfy new demand, integrate more renewable energy while keeping consumer rates as low as possible and maintaining reliability.
In the letter, we recommend the study examine how existing RTO market structures have impacted the cost of electricity to retail consumers and what, if any, reforms could improve their performance. We also ask that the study explore the reliability impacts of wholesale market structure and, if resources allow, develop a set of best practices regarding RTO expansion.
Additionally, our organizations request that the study “investigate the cost impacts of federal policy regarding market structure, namely the net benefits to retail consumers” resulting from the formation of RTOs and Independent System Operators.”
“For competition to thrive, independent power producers must have access to the transmission system to ensure they can reach their customers," said Robert Dillon, Executive Director of the Energy Choice Coalition. “The Energy Choice Coalition shares the belief that a new look at the evidence on the benefits of RTOs and a discussion of how to increase competitive forces in electricity markets further is overdue. The most recent review was done more than a dozen years ago and was inconclusive due to the lack of data. Federal regulators owe it to ratepayers to provide objective data so that federal and state regulators can make informed decisions.”
The letter to Congress is signed by eight other consumer-focused organizations. A copy of the letter is attached and can be found online here.
The Energy Choice Coalition is a nonprofit organization whose members support free-market competition in retail electricity markets. The ECC works with its members and partners to advocate for policies that accelerate the transition to a 21st-century electricity system and the adoption of clean, affordable, reliable energy sources.