Forbes: Competitive Markets Yielding Innovation, Lower Rates

Competitive electricity markets are making innovation possible, reports Forbes Magazine in an article that highlights Vornado Realty Trust, a large owner and manager of real estate in the United States.

Using an innovative load response program offered by COMPETE member Constellation NewEnergy, Vornado is able to modulate the power it uses in its properties based on the real-time pricing available in open competitive markets.  As a result, Vornado is using less energy and, in turn, lowering its costs.

The article also includes some great stats illustrating the broader success of competitive markets:

Competitive retail providers… offer rate plans that allow customers to lock in current rates for all or almost any portion of their usage. Customers can also opt to pay different rates based on when they use power or to get paid for using less power during certain peak periods...

When regulations were lifted in a big chunk of eastern Pennsylvania this year, 26% of customers representing 40% of the electricity load switched providers in just ten weeks. One reason is price; another is that all its customers have smart meters.

The Forbes article does, however, propagate a common misnomer – that competitive markets are “deregulated”.   Competitive electricity markets are anything but deregulated.  Rather, these markets have been restructured to promote competition among energy market participants while maintaining strict federal and state regulatory oversight.

Joel Malina | March 26, 2010