ERCOT

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.
 

Dozens of alternative energy suppliers have been attracted to Texas’ competitive electricity market, and the competition between suppliers is creating significant economic benefits for consumers. As market participants compete against each other to provide the best possible service at the lowest cost in order to attract and retain customers, market forces are driving consumer costs down while increasing choice and service offerings, and stimulating innovative technologies.
 

The independent market monitors for every Independent System Operator (ISO) and Regional Transmission Organization (RTO) in the country have once again found that organized markets are competitive, and provide economic benefits to consumers. The findings were based on detailed reports for 2009, and were highlighted by the Electric Power Supply Association.
 

Customer satisfaction with competition has never been higher in Texas, according to the third annual JD Power and Associates survey on customer satisfaction with retail power suppliers.
 
Retail customers reported increased satisfaction levels and high power supplier switching rates , thanks to a mix of innovative new energy programs, customer service, lower wholesale electricity prices and deals that will save Texas consumers millions of dollars over the next few years while helping to stimulate clean energy technology.
 

A combination of hotter summers, an aging electrical grid and uneven adoption of smart grid technology has increased the need for electric infrastructure investment, according to a University of Minnesota research study cited by CNN reporter Thom Patterson.
 
COMPETE agrees significant investment is needed in our national grid to reach our nation’s sustainable energy goals and maintain electric reliability needs. But CNN missed an important opportunity to highlight how competitive electricity markets are helping ensure reliability and encourage innovation and investment while protecting consumers from the financial risk of poor or failed investment decisions.
 

Average wholesale electricity prices in the Electric Reliability Council of Texas (ERCOT) have once again dropped, providing even more benefits for consumers coping with the economic downturn, according to ERCOT’s 2009 State of the Market Report. Prices fell 56 percent from 2008’s average price to $34.03 per megawatt-hour (MWh), the lowest price experienced by any U.S. electricity market.
 

Competitive electricity markets are helping lead the nation toward a smart grid future. So says a new report from GTM Research, which ranks the top 10 states leading smart grid implementation. Seven of the 10 states participate in competitive electricity markets. California ranks first, followed in the rankings by Massachusetts, New Jersey, New York, Ohio, Pennsylvania and Texas.
 
These state rankings result from a mix of effective regulatory oversight and private investment, but all deliver economic and environmental benefits to consumers. “These 10 states are the laboratories for U.S. smart grid policy, and their influence on the pace and scope of deployment is durable and growing,” said Stephen Munro, energy policy analyst for GTM Research.
 

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.