Wellinghoff Champions Benefits of Competitive Markets

“Fair, transparent, open and efficient competitive markets are what we really need to emphasize in this country,” Jon Wellinghoff, Chairman of the Federal Energy Regulatory Commission, said at a recent energy policy forum examining how to meet energy demand while reducing carbon emissions. “I think if we did that in a comprehensive way a lot of these problems would take care of themselves.”

The facts support Chairman Wellinghoff.

Competitive electricity markets are reducing power demand across the country. A June study by Navigant Consulting determined that competitive markets provide clear price signals for electricity producers and consumers. In addition, eight of the ten most energy-efficient states are located in competitive markets. But competitive markets are also adding clean energy capacity to the grid. As of 2009, nearly 80 percent of wind resources have located in competitive markets, and nearly three times as much wind energy was produced in those states compared to rate-regulated markets.

Indeed, the 2009 State of the Markets report by the ISO/RTO council stated competitive electricity markets were “shattering barriers” for renewable energy resources – a fact Chairman Wellinghoff recognized by noting the “300,000 megawatts of wind in the queue waiting to get on transmission lines just in the independent system operator’s areas in the country.”

The International Energy Agency released its World Energy Outlook this week, predicting electricity demand to grow 76 percent worldwide by 2030. Meeting this new demand for electricity without increasing emissions will be difficult without a diverse solution of energy efficiency, demand response, and new clean energy sources.

More and more observers – including Chairman Wellinghoff – recognize that competitive electricity markets are doing their part to meet this need and that competition is helping to drive down prices down for consumers.

Joel Malina | November 11, 2009