Financial risk

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.
 

As the economy continues its rebound, jobs creation has become the nation’s top priority – and competitive markets are doing their part.  Across the country, new energy infrastructure investments, and the job they create, are benefiting states that have opened their markets to competition.

Competitive markets also drive investment in new generation in order to meet future energy demand needs – which have been estimated at $1.5 - $2 trillion in new investment over the next 20 years.  In Texas, for example, competition has led to the development of more than 41,000 megawatts of new electricity generation and $5.8 billion in transmission infrastructure.

Considering the amount of infrastructure needed in the future, competitive markets shifting financial risks for these new projects from consumers to private investors is an important distinction from monopoly markets, where utilities can increase consumer rates to pay for new projects.