Consumer benefits

The age of the smart grid is dawning, with millions of smart meters already installed across the country. But some utilities have encountered opposition to smart-meter pilot programs, and the question of how to communicate benefits to consumers complicates the picture.
 

Few consumers when they purchase an airline ticket, pay their electric bill or turn on their gas stove give a passing thought to the money they are saving or the innovation and convenience made possible thanks to Alfred E. Kahn.  But Kahn, an economist who died December 27 at the age of 93, had a pervasive influence in turning back nearly a century of consumer-costly price regulation in industries that span not just transportation and energy, but almost the entire economy.  He was far more than merely the “father of airline deregulation,” as most obituaries are heralding him. 
 

Technology innovation driven by market forces has unlocked abundant domestic supplies of natural gas from unconventional geographic formations, resulting in enormous consumer benefits– namely, lower electricity prices and cleaner air. This natural gas success story shows how market forces drive innovation better than regulation, and should serve as an important lesson for policy makers tempted to intervene in the markets in response to transient market price signals.
 

Texas’ competitive electricity market, hailed by some as the most mature market in the nation, is on the verge of instituting a new system to improve electric grid performance and increase transmission efficiency to provide the lowest possible costs for consumers. The Electric Reliability Council of Texas’ (ERCOT) transition from a “zonal” market to a “nodal” market will take place on December 1st.
 

A new staff report from Arizona Corporation Commission (ACC) urges a full evaluation of the state’s electricity market given the benefits competition could offer the state’s consumers, economy and environment. The report, issued last week, comes as the ACC considers revising state rules to introduce competition to its power market.
 
Competition would create multiple economic benefits for Arizona consumers, according to ACC staff:
 

Smart grid technology is creating economic and environmental benefits, but must reach all consumers and enable intuitive energy use decisions to truly achieve its potential. This message was the focus of a recent panel discussion on consumer perspectives during a smart grid policy conference at the Brookings Institution.
 

Competition in Texas has created economic and environmental benefits for consumers, the Texas Tribune reports in an article examining the results of the state’s competitive retail market. The COMPETE Coalition applauds the Tribune for correctly identifying many successes of Texas’ competitive electricity market.
 
COMPETE closely follows electricity developments across the country and agrees with many observers that the Texas market is without question one of restructuring’s biggest success stories, providing consumers a robust choice of competitive power suppliers. “From 2002 to mid-2009, 86 percent of customers made at least one observable switch, whether between providers or to a different plan offered by the same provider,” the Texas Tribune reported.