Robert Dillon
Upcoming Webinar: Market Formation and the ...

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.

Upcoming Webinar: Market Formation and the Benefits of Competition
Robert Dillon
The real debate is how to best implement ...

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 real debate is how to best implement competitive reforms—not whether to pursue them
Robert Dillon
Texas Lawmakers to Hear Bill Threatening ...

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.

Texas Lawmakers to Hear Bill Threatening State's Competitive Energy Market
Robert Dillon
Principles of Energy Freedom for Electricity ...

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.

Principles of Energy Freedom

  • 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.

Principles of Energy Freedom for Electricity Consumers
Robert Dillon
Farrell: Taking the utility monopoly door down ...

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.

Farrell: Taking the utility monopoly door down to put more solar up

Renewables top coal in power generation for first time

Americans used more energy from renewable sources last year than from coal for the first time since 1885 - when coal replaced wood as the dominant fuel source, according to the U.S. Energy Information Administration’s (EIA) Monthly Energy Review.

Coal accounted for 11.3 quadrillion British thermal units of energy in 2019, a 15% decline from the prior year, and total renewable energy consumption grew by 1%. This outcome mainly reflects the continued decline in the amount of coal used for electricity generation over the past decade as well as growth in renewable energy, mostly from wind and solar.

IRS Extends Renewables Tax Credit Deadline By A Year

The Internal Revenue Service on Wednesday issued guidance extending the placed-in-service deadline for both the production tax credit for renewable energy facilities under section 45 of the Internal Revenue Code and the investment tax credit for energy property under section 48.

The new guidance gives wind and solar developers an extra year to meet so-called safe harbor requirements to qualify for the tax credits. The Treasury Department decision applies to projects that get under

The IRS notice is here.

“Treasury’s decision is welcome news for the renewable energy sector, which has been struggling with the government-mandated shutdowns along with the rest of the country,” said Robert Dillon, executive director of the Energy Choice Coalition. “This provides sorely needed flexibility for an industry that has lost an estimated 600,000 jobs in the past three months.”

The notice extends the safe harbor requirement from four to five years for projects that started construction in 2016 or 2017, which is beneficial for projects that have been delayed by supply chain or financing delays.

New Jobs Reports Detail Pandemic’s Grim Impact on U.S. Renewables

The far-reaching implications of a global pandemic has disrupted every facet of the economy. Local markets across the nation are reeling in response to an economic downturn previously unheard of in scope and size.

Clean energy—a fast-growing industry only months ago and a significant job creator for more than a decade—is now dealing with rampant job loss, as new development activities and investments have been stifled in the wake of COVID-19.

Energy Choice Coalition Signs Letter to Energy & Commerce and Energy & Natural Resources Committees on Competitive Electricity Markets

Energy Choice Coalition Signs Letter to Energy & Commerce and Energy & Natural Resources Committees on Competitive Electricity Markets

The country is experiencing a public health and economic emergency, the full impact of which will not be fully understood for some time. Given the foundational role that electricity plays in unlocking virtually all economic activity in the United States, it is vital that Congress take full advantage of any opportunity to lower consumer electricity costs and expand jobs and economic activity in the electricity sector.

COVID-19 Relief Measures for Renewables

We recently shared analyses by Wood Mackenzie and various industry associations about the pandemic’s impact on our nation’s transition to clean energy. In short, all energy sectors, including renewables, have been hit hard and will need significant time to recover. However, they all saw plenty of opportunities in the post-COVID marketplace.

The question for lawmakers is how to hasten recovery with specific policy solutions. Certainly, a number of measures could be added to upcoming stimulus packages, or they could be passed à la carte. Many small businesses operate in these sectors and have received some support from the third stimulus package, and Congress should double down on economy-wide solutions that help them.

Wood Mackenzie, Industry Associations Report Coronavirus Impact on Energy Transition

Wood Mackenzie, Industry Associations Report Coronavirus Impact on Energy Transition

With over half of the world’s population and most of the United States under lockdown because of the COVID-19 pandemic, energy demand has dropped to levels not seen in decades. It has all happened so quickly that reliable analyses of the impact on the energy sector have been changing rapidly. Even now, no one knows what will unfold the next few weeks let alone months or years. But early estimates are coming in, and they are troubling.

One of the most trusted authorities on the energy sector is Wood Mackenzie. This consultancy firm that began in the 1970s by developing expertise in upstream oil and gas has broadened its focus to deliver the same level of detailed insight for every interconnected sector of the energy, chemicals, metals, and mining industries it now serves around the world.

Virginia Ratepayers Should Keep an Eye on the State Senate

Virginia’s monopoly utility, Dominion Energy, lost a major battle Wednesday when the Virginia Senate approved a bill restoring state regulators' oversight of how electric utilities can write off certain costs. Dominion has strongly opposed the vote and was able to convince the Senate to reconsider, putting off a final decision.

The bill’s fate is still uncertain as it remains one of the most contentious topics between the Senate and the House as this year's legislative comes to a close on Saturday.

South Carolina Legislature Commits to Study Retail Electricity Choice

South Carolina is currently not among the handful of states that allow residents to choose their energy supplier, but that could soon change. The state legislature is weighing a proposal to create a study committee to look at the benefits of residential energy choice. The past year has seen a wave of momentum among states looking to adopt retail energy choice. The center point of this movement has been in the South, where states like Virginia, Florida, and the Carolinas have pushed grassroots efforts to increase competition in their power markets.

Energy Choice in Arizona: Current Status and Next Steps

The battle to grant American consumers a choice in their energy provider is a state-by-state fight, and one that has seen over a dozen individual states find success. In contrast, a handful of other states are ground zero for this push to continue reaching new communities.

Arizona is one of those states ripe for progress, and in fact, has among the brightest spotlight being shined on it by both energy choice advocates and the opponents who want to see utilities retain their monopolies.

In Middletown, Pennsylvania, the Battle for Energy Choice Gets Hyperlocal

In Middletown, Pennsylvania, the Battle for Energy Choice Gets Hyperlocal

As those who fight for the freedom of energy choice know, the ability to choose a power supplier opens doors for individual customers. A single household or commercial entity can evaluate which energy suppliers align most with their needs, whether through lower prices, increased flexibility and personalization in rate structure, a greater presence of renewable energy, or otherwise. The mere presence of open competition on the energy market, meanwhile, shifts the motivations of power providers. The utilities will see they can no longer automatically default to monopolies, but rather they must earn the business of customers, like every other industry across the country.

In Northeastern States, Energy Choice Under Attack as Electricity Retailers Get Restricted

In Northeastern States, Energy Choice Under Attack as Electricity Retailers Get Restricted

Much of the attention in the realm of energy choice recently has been in the southern United States, with the Energy Freedom Act in the Carolinas, the Florida Supreme Court striking down the energy choice ballot initiative, and the Virginia Energy Reform Act. But as 2020 comes into full swing it has become clear that the Northeast is an integral battleground.

In the past, northeastern states have been great examples of the benefits of energy choice and the successful implementation of such programs. But those who want to restrict energy choice are fighting in these states to take away the freedom of energy choice.

Virginia Energy Reform Act

Virginia Energy Reform Act

Virginia will be the next battleground state to see if utility monopolies are going to continue to be able to deny consumers the ability to choose their energy. VERC, the Virginia Energy Reform Coalition, has introduced a bill to end monopoly control of Virginia energy systems and expand consumer choice. It’s called the Virginia Energy Reform Act, and it’s a bipartisan bill to establish a competitive energy retail market. It would include consumer protections and education, creation of an independent grid operator, and phase out wholesale capacity markets. 

R Street submits public comments on FERC's proposed changes to PURPA

The energy team over at R Street submitted comments this week to the Federal Energy Regulatory Commission’s (FERC) on proposed changes to the Public Utility Regulatory Policies Act (PURPA) regarding the rules governing qualifying facilities (QF) and longterm purchase agreements in wholesale competitive markets.

Michael Haugh at R Street writes: “Competitive wholesale markets are one of the best ways to provide low cost, efficient power to customers. A recent study by the U.S. Energy Information Association found that between 2008 and 2017, more than 103 gigawatts (“GW”) of renewable generation have come on line, but only 14 GW are certified as a QF. This shows that renewable generation has evolved to become competitive with traditional generation sources. Along with RPS enacted by states, robust wholesale markets have provided stable revenues for renewable generators. Many states hold competitive auctions to procure resources for their RPS requirements, which create a market for renewable generators. These markets limit the necessity for the QF designation and the long-term purchase agreements that come with it. The QF purchase agreements can lead to a suppression of the market in the instance where a QF does not win, or even participate in, a state RPS auction and then requires the state to honor the QF obligation. Situations like these can lead to higher overall costs for the utility customers which, in turn, defeat the purpose of the competitive solicitation.”

Read R Street’s full comments here. The FERC docket number is RM19-15-000. Public comments are due later this month. Further details about FERC’s proposed rulemaking to modernize PURPA is available at FERC.gov.