Oversight Hearing Demonstrates Support for Competitive Electricity Markets

The benefits of competition were a key topic at a recent Federal Energy Regulatory Commission (FERC) oversight hearing by the House Energy and Commerce Committee’s Energy and Environment Subcommittee.

“Organized wholesale electric markets create opportunities and encourage innovations that benefit consumers,” FERC Chairman Jon Wellinghoff said.

Wellinghoff noted that one of the largest benefits of these markets is the ability to level the playing field between traditional generation resources and a wide range of resources including renewable energy, demand response, energy efficiency and distributed generation. “Removing barriers that keep renewable energy resources from competing in wholesale markets must be part of our strategy to move toward energy independence.”

FERC Commissioner Marc Spitzer highlighted the link between competition and necessary system investments. “Competitive markets also play an important role in providing market signals to highlight where generation and electric transmission should be built,” noted Spitzer. “Consumers are the ultimate beneficiaries of these investments.”

Commissioner Phillip Moeller drew a link between revolutions in telecommunications technology in the 1980s and 1990s and the potential for energy technology today. “I witnessed the benefits that consumers enjoyed when they were empowered with more choices and a greater ability to manage their telecommunications services. This led to new products and services enjoyed by consumers that were nearly unimaginable 25 years ago,” said Moeller.

One such service benefitting consumers across organized markets is demand response. “The potential for peak electricity demand reductions across the country is 188 gigawatts, up to 20 percent of national peak demand,” said Commissioner John Norris. “Consumers as a whole can realize significant savings when demand response is used to substitute for expensive power during periods of peak demand.”

As an advocate for competitive markets, COMPETE is encouraged to see continued support for increased consumer choice and energy innovation through competitive electricity markets.  “As a proponent of competitive markets,” concluded Commissioner Spitzer, “I believe that the Commission must continue to focus on enhancing competition.” Joel Malina | April 12, 2010