Electricity rates

Maryland voters overwhelmingly believe that competition is the best way to control the cost of electricity, and they want much more information about the electricity choices they have. That’s according to a poll conducted by Opinion Works and supported by the COMPETE Coalition along with a broader group of energy consumers.

The survey of registered Maryland voters found that the electorate favored competition over a return to monopoly service as a better way to control the cost of electricity by two-to-one.  An astounding 83 percent of voters favor the existing market competition that allows them to choose their electricity provider.

Hyperbole and half-truths have clouded the picture of Pennsylvania’s expiring rate caps and ignore the fact that retail electric competition has saved that state’s consumers billions, according to a recent op-ed by Jan Jarrett of PennFuture. Scary stories, she says, are becoming urban legends.

Responding to critics who argue consumers should return to monopoly control of electric markets, Jarrett points out that restructured power markets have paid dividends to much of the state. Beyond the fact that state electric rates are now 5 percent lower than the national average (compared to 15 percent above the national average before competition), renewable wind power generation and energy conservation innovations have boomed in Pennsylvania’s organized market –a direct benefit of competition.

Thursday’s Hartford Courant brought good news for electricity consumers: “Many CL&P Customers To See Lower Rates Starting Jan.1” Electric rates will decrease 5.2 percent in January for most of Connecticut Light & Power’s 1.2 million customers, continuing a trend of declining electricity prices in competitive electricity markets as reflected in the state’s declining costs.

The rate reduction is a result of Connecticut’s participation in New England’s wholesale competitive market managed by ISO New England, a regional transmission organization. Consumers who shop for competitive energy suppliers in Connecticut have benefited directly from falling electricity prices in the past year – a trend recently noted by the Federal Energy Regulatory Commission.

The state of Texas scored an “excellent” in an independent assessment of restructured electric markets — proving to be one of the most successful states in providing the benefits of retail choice to customers. The report, issued by the Energy Retailer Research Consortium this month, highlights how Texas has made outstanding progress by adopting rules to encourage numerous power producers and retailers to compete for customers and provide a variety of electricity services.  In addition, a recent op-ed in the Arizona Republic by Andrew Kleit, a professor of energy and environmental economics at Pennsylvania State University, further underscored the “remarkable” results in Texas.

However, a Fort Worth Star-Telegram article this week downplays this significant progress and instead focuses on a simplistic comparison of electricity costs in Texas versus neighboring states.  This narrow view undervalues the significant economic and environmental benefits the Texas market is providing the state’s consumers. 

Competitive electricity markets create jobs and promote energy efficiency and renewable energy development, concludes a study released today by the Energy Retailer Research Consortium, an independent research group that supports retail energy choice.  The Annual Baseline Assessment of Choice in Canada and the United States (ABACCUS) found that customer choice is thriving in many U.S. states and Canadian provinces because well-structured electricity markets are fostering the introduction of numerous product offerings and services that are not available in monopoly electricity markets.

A key Arizona legislator is pressing to reopen the state’s electric markets to full competition in order to spur job growth, reduce emissions, encourage innovation and reduce costs for consumers. Representative Lucy Mason of Prescott, chair of the House Water and Energy Committee, recently held a legislative forum that cited a report by the Goldwater Institute to urge competition in the state’s electricity market.

The Goldwater Institute report, Opening the Grid: How to Recharge Arizona's Electricity System for the 21st Century, was authored by two respected economists and finds that electricity restructuring has been successful in Britain, Texas and Pennsylvania, and would work in Arizona if the state’s electricity market was open to competition.

Retail competition in Illinois has increased significantly since 2006, the Illinois Commerce Commission concluded in its Triennial Report on Retail and Wholesale Competition in the Illinois Electric Industry issued this week. During a transition period in the state, which ended in 2007, competition was largely confined to the largest commercial and industrial customers of the state’s two largest utilities, Commonwealth Edison and Ameren. The new data shows substantial numbers of medium and small non-residential customers switching to competitive power suppliers.

Nearly all (93%) of the largest commercial and industrial customers of both ComEd and Ameren are buying power in the competitive market. The Commission found that the level of switching activity is noticeably increasing for small and medium-sized customers — 55% of ComEd’s and 38% of Ameren’s customer load under 1 megawatt is provided by a competitive supplier.