Electric rates

A new study shows that electricity pricing policies may become a major obstacle to electric vehicle (EV) affordability, but time-of-use pricing – a hallmark of competitive markets – could be the solution.
 

Illinois state lawmakers protected the state’s electricity consumers this week by rejecting legislation that would have subsidized construction of a $3.5 billion power plant.
 
Had it passed, the Taylorville Energy Center (TEC) subsidy bill would have threatened jobs by dramatically increasing consumer prices. TEC sponsors had proposed subsidizing the plant’s construction by requiring electric distribution companies to buy power from the plant for 30 years at above-market prices. These distribution customers would then have had to pass this additional cost along to their customers.
 

New Jersey Governor Chris Christie and the state legislature are considering a proposal that will add a new charge to consumer energy bills and threaten thousands of jobs. The implications of this legislation are simple: higher energy bills for consumers and the very real threat of layoffs by companies that will no longer be able to afford operating costs.

A major Pennsylvania environmental group has endorsed competition’s benefits, just as rate caps expired across the state and millions of consumers gained the ability to shop for their electricity on January 1. PennFuture’s report, “Consumers Win: A Decade of Electricity Competition,” touts the success of competition, saying “the benefits to Pennsylvania ratepayers cannot be disputed.”
 

Several major competitive power suppliers have recently entered Maryland’s electricity markets, and the resulting competition is driving switching rates higher among consumers – a trend noted in a recent COMPETE report on the success of retail electricity markets.
 
These developments come fast on the heels of similar upward switching trends in other Mid-Atlantic states, and happen as lower energy prices present opportunities for consumers to lower their costs.
 

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 Detroit News has endorsed the effort of state lawmakers to roll back Michigan’s cap on competition in an editorial urging that limits on competitive market access be lifted from 10 percent to 25 percent of a utility’s consumer demand. The bipartisan legislative proposal, introduced in both state legislative chambers in June, would revisit a 2008 law that bars the vast majority of Michigan’s consumer demand from choosing an alternative, competitively priced power supplier.
 

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.
 

Consumers in New England strongly support the power of competitive markets to stimulate investment in clean energy and combat global warming, an annual survey by the New England Energy Alliance (NEAA) demonstrates.
 

Legislators in Michigan have stood up for their constituents by introducing legislation to ease limitations on the number of consumers in the state who can purchase power from competitive power suppliers. The bipartisan companion bills introduced by Senator Wayne Kuipers and Representative Roy Schmidt would raise the state’s limit on retail choice from 10 percent to 25 percent of the utility’s total electricity demand.

This legislation comes on the heels of a petition by scores of Michigan businesses, including many COMPETE members, to lift the limitation on electricity choice.