Electricity Policy Blog

Yukio Edano, Japan’s Minister of Economy, Trade and Industry, is advocating broad competitive reforms of his nation’s electricity sector in response to looming power shortages. Japan must strip its regional electric utilities of monopoly protections as part of reforms responding to last year’s nuclear crisis, Edano told the Financial Times.
 
“The important thing is to bring into play appropriate competition in the electricity sector and to allow consumers – the users – to have a choice,” Edano told FT. “That is a major goal.”
 

The competitive electricity market in Texas celebrates its 10-year anniversary this month. Texas effectively navigated some growing pains along the way and has matured into arguably the nation’s most successful competitive power market, providing extensive benefits for customers.
 
As Dr. Herman Trabish notes in GreenTechMedia.Com, the market was improbably launched a decade ago in the immediate aftermath of California’s failed initial market design and the bankruptcy of Enron Corp. 
 

Maryland’s program requiring consumers to subsidize the development of new electricity generation facilities is based on outdated data and will build new generation capacity that is not needed, two environmental groups said in comments submitted to the Maryland Public Service Commission (PSC).
 
The Sierra Club and Chesapeake Climate Action Network submitted the comments in advance of a January 31 public hearing the PSC will convene to consider the request for proposals (RFP) the commission ordered Maryland utilities to issue in an effort to develop 1,500 megawatts of new natural gas-fired generation facilities in Maryland.
 

Competitive power producers have weighed in at the Maryland Public Service Commission strongly urging against moving forward with a request for proposals (RFP) for new natural gas-fired generation facilities subsidized by fees assess the state’s electricity consumers.
 
The comments were submitted in advance of a January 31 public hearing the commission will convene to consider moving forward with this proposed anti-consumer power plant subsidization program. 
 
The Electric Power Supply Association (EPSA) and the PJM Power Providers Group (P3) told Maryland utility regulators that the state’s electricity consumers are benefiting from competition, and moving forward with the RFP will undermine the benefits of competition while imposing long-term costs on customers that should instead be borne by investors.
 

A large ocean-going vessel turns by degrees. That’s an apt analogy for the increasing acceptance of electricity competition measures in the West, which a decade ago suffered in the aftermath of California’s poorly designed first-in-the-nation electric industry restructuring effort.
 
The most recent example is in Arizona, which has long been a supplier of wholesale electricity to California’s restructured and now successful competitive power market. A settlement agreement was struck in an Arizona Public Service Co. (APS) rate case that will allow 200 megawatts of the utility’s large commercial and industrial customer base to select a wholesale supplier to provide energy to APS on their behalf.
 

Competition in electricity markets — rather than monopoly regulation — is the best way to keep electricity prices affordable and spur innovation in new products and services, an Ohio industrial customer wrote in Saturday’s Columbus Dispatch.
 
“Competition also helps ensure an adequate supply of reliable power to meet Ohio’s energy needs. Most important, it promotes a competitive business climate that attracts investment, stimulates economic growth and supports needed job creation throughout the state,” said Steve Elsea, Director of Energy Services at Leggett & Platt, a diversified manufacturer of engineered components and products found in most homes, offices and automobiles.
 

Florida Governor Rick Scott took office with a seven-year plan to create jobs that targeted “unnecessary costs” for businesses in general and “relatively expensive electricity costs” in particular.
 
Targeting electricity costs could save businesses $3.5 billion, the governor said in unveiling his agenda. He hired an energy adviser, Mary Bane, a former executive with the Florida Public Service Commission, to spearhead development of a plan to lower electricity costs for businesses in the Sunshine state.

A casual review of the news at the end of 2011 highlighted the worldwide trend in which markets for electricity are increasingly being adopted to meet economic needs.
 
Saudi Arabia’s government-owned electricity monopoly, the Saudi Electricity Company, announced it would be restructured to promote competition-enabled economic efficiencies. Ali Bin Saleh al-Barrak, Saudi Electricity's chief executive, said the company would be restructured into four competing power generation companies and two other separate companies responsible for distribution and transmission, “which will help increase productivity, efficiency and attract investment to meet high demand.”