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.
A new paper from the energy experts at The R Street Institute finds that full competition in electricity markets delivers the most consumer benefits. The report provides further evidence that the existing big government central planning regulatory system in most state electricity markets is impeding the energy transition and saddling consumers with higher utility bills.
The paper, Electric Paradigms: Competitive Structures Benefit Consumers, recommends states pursue full restructuring of their wholesale and retail electricity markets to capitalize on private sector investment and consumer demand for new products and services.
“Electric competition has worked. It provides economic, reliability, environmental and governance benefits. It can work much better with stronger pro-market reforms,” the authors of the paper conclude.
The Texas State Senate will take up an energy package today that sponsors claim will strengthen the state’s electricity system, but that threatens to undermine Texas’ first-in-the-nation competitive market and burden Texans with higher energy bills.
The legislative package, unveiled earlier this month, comes two years after a deadly winter storm paralyzed the state, sparking a public debate about the power system’s resiliency.
The Senate Business and Commerce Committee is holding a hearing on the package at 8 a.m. central time Thursday, March 23.
The centerpiece of the package, Senate Bill 6, would require the Electric Reliability Council of Texas (ERCOT) to add 10,000 megawatts of natural gas-fired “back-up” generation. That’s roughly a dozen new gas powerplants at a cost that Stoic Energy President Doug Lewin of the Texas Energy and Power Newsletter estimates at $11 billion.
The following principles provide a unifying foundation for well-designed consumer choice in retail electricity markets, as well as the associated transmission and distribution system operations.
Consumer Choice. Customers should have a choice regarding who supplies their energy and the type of rates they have access to, from standard flat rates to time-of-use and even real-time pricing rates, in which case they may choose to adjust their consumption patterns to reduce their electricity costs.
Encourages Electrification. As electricity becomes cheaper, while other energy prices remain more volatile, customers are incentivized to switch to more electric devices, including vehicles, appliances, and HVAC systems.
Solar company Sunnova wants to give new homeowners an alternative to electric utilities like Pacific Gas and Electric, cracking open the door to competition with a combination of solar and batteries in a “microgrid.” The proposal would end nearly a century of guaranteed monopoly for California utilities by letting other companies not just sell power but use an alternative delivery system to the utility’s platform. Regulators shouldn’t just let them through this opening, they should take the door off its hinges.
Numerous companies and homeowners are proving the upside of broadening grid access. OhmConnect, Tesla, and other companies are providing hundreds of megawatts of electricity capacity, forestalling rolling blackouts in California. Community solar developers in Minnesota have installed over 800 megawatts of solar projects that are reducing energy bills for over 12,000 households and hundreds of businesses. More than 1 in 4 Hawaiian households have spent their own money to add electricity capacity, reducing the island state’s reliance on imported fuel oil.
Everywhere these entrepreneurs turn, however, they’re being blocked by the incumbent utility that wields its monopoly platform as a weapon. Allowing this abuse of power threatens grid reliability, affordable electricity and our democracy.
