Blog entry October 2009

Because of a law passed one year ago in Michigan mandating a 10 percent cap on competitive electricity,consumers are now paying more for less, said the Customer Choice Coalition. This week the Coalition marked the one-year anniversary of the law’s passage by revealing the impact it’s having on customers across the state. The Coalition’s Executive Director Barry Cargill said, “Customers are paying more now than ever before.Detroit Edison residential customers are paying 20 percent, or $130, more this year and Consumers Energy customers are faced with a 9 percent increase at the cost of about $60 per year.

Electricity consumers in Maryland are choosing competitive suppliers, and the results are getting noticed. A local radio station highlighted the successes of energy competition Wednesday, asking resident Matt Berres how he achieves double-digit savings while knowing his energy is greener than the average Maryland kilowatt. Matt has chosen to enroll in the Clean Currents wind-based electricity program, which would not have been possible without Maryland’s customer choice laws. Along with 4,000 other local customers, Matt is enjoying the benefits of energy competition: “Compared to Pepco's summer rates, we're saving about 12 to 13 percent on our bill,” he said. The Clean Currents program allows its customers to lock in at those low rates, so they know they won’t face a hike later on. The broadcast zeroed in on the bottom line.

Very interesting blog post by Marc Gunther – sustainability expert/Fortune Contributing Editor – yesterday on the importance of emerging energy storage technologies. Energy Storage & Power, a joint venture with COMPETE member PSEG, is pioneering some innovation in the form of Compressed Air Energy Storage technology that stores off-peak energy for release when needed during peak demand hours. Energy storage offers numerous benefits, most notably the ability to match electricity supply (especially renewable energy) with demand. It helps facilitate greater use of renewable energy sources such as wind and solar. Many power generators are already pursuing energy storage capabilities.

Have we rounded the corner? California Gov. Arnold Schwarzenegger has signed legislation broadening the scope of retail power competition in California.  While but a small step forward, that still keeps residential customers captive to monopoly suppliers; it is an encouraging move in the right direction. 

To a certain extent, electric competition has been on the defensive since California became the first state in the nation to open its electricity market to competition.  It worked rather well for a couple of years until it cratered spectacularly in 2000 because of market design flaws not because of ‘customer choice’.