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.
Recent polling demonstrates that a majority of Americans believe competitive markets are more effective at lowering consumer energy costs than energy monopolies. Additionally, Americans see competitive markets as the best vehicle to promoting technological innovation, maximizing energy efficiency, ensuring energy reliability and reducing carbon emissions.
The Senate Finance Committee this week highlighted the important role of energy storage in achieving the transition to a zero-carbon power sector with the advancement of a $259.5 billion clean energy package that includes tax incentives for stand-alone storage and combined solar and storage projects.
The Clean Energy for America Act by Oregon Democrat Sen. Ron Wyden seeks to streamline the tax code to make clean energy tax credits more accessible and effective. The Wyden package differs from President Biden’s American Jobs Plan, which also included an investment tax credit for storage, in that it would replace the current patchwork of 40 clean energy credits with three categories of technology neutral incentives for zero-emission generation.
With the White House focused on a massive infrastructure package, Americans are likely to see a rapid uptick in the development of clean energy. Ideally, that would provide consumers even more opportunities to choose their energy sources.
President Joe Biden’s infrastructure plan would increase the availability of renewables, outpacing the current rate of more than 20 percent of all U.S. electricity generated in 2020, and create job opportunities.
Technological innovation and the rapid pace of change offered via digital technologies and the Internet of Things (IoT) is prompting wide-scale shifts across the economy. These transformative technologies weren’t created by or exclusively for the utility industry, but their wide availability and rapidly falling costs have allowed them to be applied in the production, delivery and management of electricity. For utility customers, that means a movement toward dispatchable energy resources (DERs), demand-side management, smart grids, and other innovative products and services.
The Conservative Energy Network (CEN) have launched UtilityPlaybook.com to track the ways monopoly utilities use their influence and power to block competition and maintain outdated fossil fuel and nuclear power plants. The new website also includes some of the great work being done at the nonprofit Energy and Policy Institute to track corruption and dirty tricks by incumbent utilities – moves that are slowing the transition to a clean energy future while charging ratepayers full freight for dirty energy.
Advocating for economic freedom and free enterprise to improve human and environmental conditions, Nick Loris’ policy paper explains how innovation and competition will solve climate change’s most difficult challenges. Rather than harmful regulations and excessive spending proposals like the Green New Deal, Loris outlines how capitalism is not the problem, but the solution.
The paper, “Free Economies are Clean Economies,” investigates and analyzes the correlation between economic freedom, limited government, open markets, private property rights, and environmental performance around the world.
One of our favorite new newsletters on Substack is David Robert’s Volts. David writes about the intersection of clean energy, climate change and politics in a way that makes a complicated subject accessible to the reader. Face it, most people don’t think much about the electricity system. They flip the light switch and if the lights come on, they are happy. David often goes deep into the technical side of the power system and new technologies. Take, for example, David’s writing earlier this year on transmission where he gets into the weeds about why it’s so difficult to build new transmission infrastructure and why it’s so necessary for the energy transition. If you’re into electricity policy, Volts is definitely worth your time.
The Solar Foundation released its annual National Solar Jobs Census report this week, projecting the solar industry will need to add 900,000 workers to meet President Joe Biden's 2035 clean energy goals.
Despite the effects of the pandemic on the U.S. economy, the solar industry’s strong start in 2020 through February and ability to adapt to market demands yielded more success than anticipated from a year plagued by supply issues and economic uncertainty. While the 231,474 workers employed by the solar industry is down 6.7 percent from the year prior, competition in 2020 produced higher labor productivity, increased diversity in the industry, generated greater consumer interest after a year of stay-at-home orders and manufactured a record 19.2 GWdc installations. Despite the positives, the report projects the industry will grow to only 400,000 jobs by 2030, leaving a gap of 500,000 additional jobs needed if President Biden’s policy to decarbonize the electricity sector by 2035 is to be successful.
The biggest barriers to expanding clean solar energy production for New Yorkers are regulatory barriers and the need to increase compensation for distributed solar generation, according to a report released this month by the New York Solar Energy Industries Association (NYSEIA).
Our friends over at the Conservative Energy Network (CEN) have launched UtilityPlaybook.com to track the ways monopoly utilities use their influence and power to block competition and maintain outdated fossil fuel and nuclear power plants. The new website also includes some of the great work being done at the nonprofit Energy and Policy Institute to track corruption and dirty tricks by incumbent utilities – moves that are slowing the transition to a clean energy future while charging ratepayers full freight for dirty energy.
We love cartoons. We have been publishing the acerbic visual commentary of Kenneth Catalino for years. We were recently introduced to the political cartoons of J.D. Crowe in Alabama’s AL.com who has long been documenting political corruption in Alabama. Crowe most recently has been targeting the sharp end of his ink pen at Alabama Power and its plan to bury legacy coal ash storage ponds at ratepayers’ expense.
A review of publicly available data by the nonprofit The Energy and Policy Institute finds that investor utilities are failing to align their businesses with the Paris climate agreement goals and investors’ expectations, according to a new scorecard of major emitting companies. The Climate Action 100+ Net-Zero Company Benchmark assesses the climate plans and performance of 159 large companies.
By all accounts, the recent winter storms that resulted in an energy crisis for millions of people across Texas is an indication, not the exception, of future weather events that have the ability to endanger power systems.
The Government Accountability Office (GAO) recently released a new report entitled Electricity Grid Resilience and testified before the Senate Committee on Environment and Public Works on its findings.
“New technologies provide utilities with additional options for meeting demand and providing reliable service. These options include variable energy resources, smart grid technologies, and energy storage,” the report explains. “Many of these options are relatively inexpensive and fast to deploy, especially compared with constructing large, conventional power plants. In addition, new technologies within the system are increasingly available for use by customers and can enable more flexible operations.”
That flexibility can be provided through Distributed Energy Resources (DERs), which can refer to both physical and virtual assets integrated into an electric grid and used individually or in aggregate to provide supplementary power to the grid, individual customers, or both. DERs have frustrated incumbent utilities that believe they present management issues, but the opposite is actually true —these resources can make the difference in a crisis.
The value of rooftop solar played out in real-time during last month’s winter storm. Houston homeowners who had invested in rooftop solar were able to enjoy uninterrupted power, despite the shutdown of the region’s power system.
We’ve already talked previously about all the things the Wall Street Journal and others got wrong about the blackouts in Texas, but Josiah Neeley over at R Street did a useful deep dive into the WSJ’s assessment that deregulated Texas residential consumers paid $28 billion more for their power since 2004 than they would have paid at the rates charged to the customers of the state’s traditional utilities and that retail choice customers paid $19.2 billion more from 2010 through 2019 than they would have if they’d stuck with their incumbent utility.
Neeley points to the peer-reviewed 2018 report from the Baker Institute which found that electricity rates in competitive market states have generally fallen in recent years, while rates in monopoly utility states tended to increase or remain flat. Texas, which has the most liberalized power market in the country, in particular has seen significant declines.
The new edition of the factbook details how clean energy faired during the COVID-19 Pandemic last year, and the results showed the U.S. clean energy sector to be resilient, even in the face of the nationwide closures and economic downturn.
A few of the top-line findings from the factbook include the 7.8 percent drop in U.S. primary energy use, which was the highest year-on-year decline in U.S. energy consumption in at least 30 years. The massive energy decline came as the entire U.S. economy contracted 3.5 percent in 2020.
As Congress considers policy solutions to address this most recent energy reliability crisis – while simultaneously working to jumpstart our economic recovery – we urge members to utilize all available levers to promote economic growth, grid reliability, job creation, climate solutions, and innovations that can lower electricity costs for the nation’s consumers.
Increasing access to data regarding electricity consumption and emissions for retail electricity suppliers would make it easier for customers to manage their energy usage and for system managers to deploy demand-side technologies, such as demand response and storage, to strengthen reliability. The full text of the letter is available here.
According to PV Magazine, over 50 million single-family homeowners in the United States want to install solar panels. That number has increased by 13 percent since the beginning of the pandemic in March 2020. The good news is that the cost of installing solar panels has dropped by 89 percent over the past 10 years. The bad news is that all the other costs – customer acquisition, permitting, inspection, connecting to the grid, installation, taxation, and system financing – have not.
These “soft costs” are an unnecessary impediment to consumers and solar companies. Solar panels are just 10 percent of the cost of a residential solar system. Yet, buyers pay significantly more than homeowners in other parts of the world due to the "soft costs" of permitting. In Australia, for example, where one in five homes has a solar energy component, consumers pay between $1.10 and $1.20 a watt, and it takes just one to three weeks to get that system installed.
The Energy Freedom Act requires South Carolina utilities to file net-metering successor plans that avoid cost shifts and provide long-term stability for solar customers. Dominion’s filing would add grid access charges, a monthly subscription cost for solar customers, and a low export rate for net metering customers that would unnecessarily inflate solar costs and devalue these investments.
The solar industry has long opposed efforts to impose tariffs on imported solar panels and hoped the incoming Biden administration would reverse a Trump-era decision that increased tariffs on solar panels and rescinded an exclusion for two-side solar panels. That hope took a hit this week when the Justice Department (DOJ) called for the U.S. Court of International Trade to dismiss an industry complaint against the October Trump proclamation.
DOJ wrote in its filing to the court that the solar industry’s argument “fails to set forth a plausible showing that [President Trump’s] determination involves a clear misconstruction of the governing statute, a significant procedural violation, or action outside delegated authority.”
