Energy efficiency

Recent calls for Maryland to revert from a competitive electricity market to a monopoly system may be good-intentioned, but they are quite misguided. Innovation has replaced the inefficiencies of the old monopoly system, giving customers new choices, competitive prices and an efficient, reliable power supply.
 

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.”
 

The New York Independent System Operator (NYISO) credited competitive markets with reducing air pollution by attracting investment in power plant efficiency and clean energy sources, according to a report in Restructuring Today and Platts Electric Power Daily.
 
Stephen Whitely, NYISO’s CEO, stated that competition has combined with carbon control programs like the Regional Greenhouse Gas Initiative (RGGI) to sharply lower emissions of sulfur dioxide, nitrogen oxides and carbon dioxide.

“Competition in wholesale electricity markets has stimulated investments in cleaner generation, increased the use of renewable resources – such as wind power – and encouraged operating changes to improve the overall efficiency of power plants,” said Whitely. 

A new report by the Center for American Progress (CAP) identifies the top 10 states for energy efficiency and credits market forces for stimulating innovation and investment. According to the report, Connecticut, California, Maryland, Massachusetts, Pennsylvania, New York, Texas, North Carolina, New Jersey, and Ohio are the nation’s top energy efficiency markets – all but North Carolina have competitive retail electricity markets.
 

Innovative smart grid and energy technology solutions can help achieve economic and environmental goals if customers have access to dynamic pricing. That message, and the role competitive markets play in these innovations, was front and center in remarks from national policy leaders at the recent National Town Meeting on Demand Response and Smart Grid. 
 
“Creating a smart grid is an essential part of the energy revolution,” said Congressman Ed Markey (D – MA) in a keynote address, before predicting that smart meter deployment will rise ten-fold over the next decade. “A global revolution in clean energy is needed, and competition between all for leadership in new energy will create jobs.”
 
Innovative new smart grid technologies are already springing up across the country, spurred on by competition. “Because we have organized markets, we are ahead in our ability to bring technology and demand response to consumers,” said Jon Wellinghoff, Chairman of the Federal Energy Regulatory Commission, during a roundtable on the future of smart grid policy. Wellinghoff cited PJM Interconnection’s 9,000 megawatts of dispatachable demand and Plug-in Hybrid Electric Vehicle pilot program, as well as Constellation NE’s VirtuWatt technology.

Clean energy resources, including demand response and energy efficiency, made up nearly three-fourths of new capacity additions in PJM Interconnection’s recently completed Reliability Pricing Model (RPM) auction. This new announcement continues the phenomenal growth of clean energy and demand response technology in the nation’s largest competitive wholesale electric market.
 

Retail competition in Pennsylvania is benefitting consumers, said several members of the Pennsylvania Public Utility Commission this week at a public hearing. Chairman Jim Cawley, Commissioner Wayne Gardner, and Commissioner Robert Powelson made their supportive comments before the PA Senate Consumer Protection and Professional Licensure Committee.

 

Commissioner Powelson dispelled tired arguments made by critics that consumers can’t make informed decisions and won’t respond to market signals, by submitting the PJM independent market monitor’s 2009 State of the Market Report into the hearing record. The report found PJM electricity markets competitive for the ninth year in a row, with wholesale electricity prices dropping over 40 percent from 2008.

 

The benefits of competition were a key topic at a recent Federal Energy Regulatory Commission (FERC) oversight hearing by the House Energy and Commerce Committee’s Energy and Environment Subcommittee.

“Organized wholesale electric markets create opportunities and encourage innovations that benefit consumers,” FERC Chairman Jon Wellinghoff said.

Wellinghoff noted that one of the largest benefits of these markets is the ability to level the playing field between traditional generation resources and a wide range of resources including renewable energy, demand response, energy efficiency and distributed generation. “Removing barriers that keep renewable energy resources from competing in wholesale markets must be part of our strategy to move toward energy independence.”

Pennsylvania has one of the most dynamic and robust competitive retail markets in the nation, declared Robert Powelson, Pennsylvania Public Utility Commissioner. Powelson wrapped up an exciting opening day at KEMA’s 21^st Executive Forum by leading a panel discussion on the outlook for competition and choice in Pennsylvania.

Regulatory certainty from the state public utility commission (PUC) is creating stability and enabling competition’s benefits to flourish. “The numbers tell the story right now,” said Powelson. Beyond the success in PPL Electric Utilities’ territory, restructuring’s results prove a powerful point:

• Customers have enjoyed 10 years of stable rates and saved over $7 billion
• Generation sources have increased their operational efficiencies
• Before competition electric rates were 15 percent higher than the national average, but are now well below the national average

Organized competitive markets create an effective mechanism to stimulate technological innovations and achieve federal emissions reductions goals. Promoting innovative solutions and market approaches delivers economic and environmental benefits to consumers.

A proposal being developed in the U.S. Senate would use a market-based approach to limiting carbon dioxide emissions from the electricity sector. While drumming up support for the tri-partisan bill, Senator John Kerry (D-MA) said that markets unleash “ingenuity” and send the proper price signals for investment. COMPETE couldn’t agree more, as outlined in a joint statement with the Environmental Defense Fund (EDF).