Competition

Eighty-eight percent of American consumers think retail electricity competition is a good idea, according to an independent survey released today by EcoAlign, a subsidiary of COMPETE member Distributed Energy Financial Group.

Today, COMPETE National Co-Chair Federico Peña, former Secretary of both the U.S Department of Energy and U.S. Department of Transportation, addressed more than 400 energy executives, regulators, energy buyers, and investors from across the country at the 22nd Annual KEMA Executive Forum in San Antonio, TX. Secretary Peña highlighted how competition in electricity markets is fostering innovation, including demand response services, smart meters, intelligent grids and renewable energy growth. He also discussed the findings of a KEMA white paper commissioned by COMPETE – released in Feb. 2011 – that highlights the correlation between competition and innovation.

Electricity bills in New Jersey are falling and Lee Solomon, President of the New Jersey Board of Public Utilities, credits competition. Solomon cited the state’s tenth annual electricity auction for Basic Generation Service, as well as favorable market conditions, as the primary factors behind lowered costs for residents and businesses.

Two regional organized markets demonstrated the benefits of competition through the Regional Transmission Organizations/Independent System Operators this week. The Southwest Power Pool (SPP) unveiled major long-term transmission plans and the Midwest ISO (MISO) reported more than a billion dollars in market benefits over the past year.

 
Today’s Baltimore Sun features an op-ed by COMPETE Co-Chairman Federico Pena. His column highlights, among other things, the myriad benefits Maryland’s competitive electricity market has delivered to the state – from efficiency, innovation and reliability to greater customer choice and competitive prices. Since introducing competition in the late 1990s, Maryland has been one of the greatest success stories around the country. The full column, which details that success, follows…
 

A new statewide poll conducted by The Fairleigh Dickinson University shows most New Jersey consumers would switch electricity providers in the state’s competitive market if they could save 10 percent or more on the electricity generation portion of their utility bill. The poll, conducted among nearly 700 residents who participate in household financial decisions, found 64 percent of residents are very likely or somewhat likely to choose a new supplier if the economic benefits were adequate.
 

Last week, the U.S. House of Representatives Select Committee on Energy Independence and Global Warming featured a discussion on the role of competition in helping to move the United States toward a clean energy economy.
 
Committee Chairman Ed Markey (D-MA), cited the virtues of competition, calling it a “positive force” for advancing clean energy and suggesting it “will be the reason solar energy becomes equitable with the grid system.” Markey’s comments helped highlight the role competition plays in fostering innovation. “The kind of innovation that has been driving down the cost of electricity…is available only in America,” said Markey. “Technology always triumphs.”
 

America’s march toward a clean energy future through competitive markets got a big boost today when the U.S. Senate unanimously confirmed the nominations of Phillip Moeller and Cheryl LaFleur to the Federal Energy Regulatory Commission (FERC).
 
FERC has responsibility as the consumer watchdog for our national energy infrastructure and future, and for the past two decades or more has pursued a market-based policy agenda in the public interest. Both Moeller and LaFleur are exceptional additions to the Commission, and both Commissioners possess a wealth of experience and a keen understanding of FERC’s long-standing policies supporting competition in electricity markets.
 

The percentage of customers shopping for alternative energy suppliers has grown in four key restructured markets, according to recently released data from state regulators.
 
These new numbers compiled from earlier this year, combined with “astounding” shopping rates in Pennsylvania’s PPL Electric Utilities service territory, are the latest evidence of competition delivering lower-cost competitively priced electricity to consumers.
 

Consumers need access to new, transformative technologies to manage their energy use, and monopoly barriers don’t make that easy, Reid Detchon, executive director of the Energy Future Coalition lamented at a Brookings Institution forum last week on climate change and the smart grid.

“Where does competition occur?” Detchon asked, citing the “structural impediments” for monopoly regulated utilities to promote reduced energy use by their customers.  Once the market signals are right, consumers’ energy use will be mitigated by price, Detchon said.

“We do need more competition,” said David Owens, executive vice president of business operations at the Edison Electric Institute, the trade group representing investor-owned utilities.  Pilot programs by utilities have shown that consumers respond to price signals, Owens noted.  These pilot programs showed there was a “tremendous shift” in energy use by low-income customers motivated to save on their electricity bill, he said.