NYISO

Between 2006 and 2008, natural gas prices were peaking at historic highs, and critics of competitive markets for electricity were citing the resulting high electricity prices as an indicator that the markets had failed. No amount of factual data showing the linkage between natural gas fuel costs and electricity prices could quell the furor in certain quarters.

COMPETE Coalition member Beacon Power announced it has successfully brought on line the first flywheel facility to provide commercial service on the U.S. electricity grid.  Beacon brought the first 8 megawatts (MW) of athe facility's planned 20 MW capacity into service, clearly showing how competitive electricity markets drive innovative technology development not possible in protected monopoly regions of the country.
 

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. 

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.
 

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.
 

Competition is helping the nation’s organized markets weather this summer’s peak electricity demands as heat waves gripped much of the country. Both private investment and innovative demand response technology, two of the most distinct benefits of competitive markets supported by the transparent price signals markets provide, have kept the lights on in spite new power-demand records.
 

Competitive electricity markets are helping lead the nation toward a smart grid future. So says a new report from GTM Research, which ranks the top 10 states leading smart grid implementation. Seven of the 10 states participate in competitive electricity markets. California ranks first, followed in the rankings by Massachusetts, New Jersey, New York, Ohio, Pennsylvania and Texas.
 
These state rankings result from a mix of effective regulatory oversight and private investment, but all deliver economic and environmental benefits to consumers. “These 10 states are the laboratories for U.S. smart grid policy, and their influence on the pace and scope of deployment is durable and growing,” said Stephen Munro, energy policy analyst for GTM Research.
 

Regional electricity markets are well-structured and well-regulated, and by delivering competitive results are providing real economic and environmental benefits to consumers, the Independent Market Monitors for the majority of regional transmission operator/independent system operator (RTO/ISO) markets said at a COMPETE-sponsored Capitol Hill policy briefing. These markets are creating innovation, new investment and competitive electricity rates – all the while ensuring system reliability, the monitors said.

During last week’s regular open meeting, staff with the Federal Energy Regulatory Commission presented their 2009 State of the Markets Report, and the outcome for energy consumers was profound.  Prices for natural gas were down by 50 percent across the country, and as a result electricity rates declined proportionately in the organized competitive markets, where gas is a key generation fuel. Costs for both natural gas and electricity were at the lowest levels seen since at least 2002 – even earlier in some regions, FERC staff reported.

Electricity prices are falling dramatically in organized competitive markets, particularly when compared with states that stayed with a monopoly-protected utility industry. But these facts are ignored in the most recent attack on electricity competition from the American Public Power Association (APPA).

APPA’s report groups competitive states in the same category as states with monopoly regulation, so it’s a murky picture if comparing competitive states with monopoly states is the goal. Besides, comparing retail rates on a state-by-state basis is a flawed way to assess the benefits of multi-state regional competitive wholesale power markets.

Price differentials in electricity have always existed – one reason why competitive states opted to restructure in the first place. For example, Illinois and Pennsylvania, two highly competitive states APPA mischaracterizes as regulated, had rates well above the national average prior to restructuring.  But consumers in those states now enjoy rates well below the national average.