Organized Electricity Markets

Less than three months after the highly publicized removal of artificial rate caps in PPL Electric Utilities’ territory, consumers enjoy multiple power supplier options and clean energy is thriving in competitive electricity markets across the state.

Consumers have saved money under the competitive model when compared to the traditional monopoly model,” James Cawley, Pennsylvania Public Utility Commission (PAPUC) Chairman, testified at a recent State Senate hearing. “It’s been a great success.” More than 550,000 customers have switched power suppliers statewide, reports the PAPUC’s PAPowerSwitch Web site, which provides consumers with advice on how to find the right competitive power supplier.

The amount of customers who have switched within the PPL Electric Utilities’ service territory is “astounding,” said Chairman Cawley. 320,000 residential customers – and 380,000 total customers – are purchasing electricity from competing providers. Fourty-six percent of total electricity demand is being met by competitive suppliers. There are 28 competing suppliers serving customers in PPL Electric Utilities’ service area, including nine suppliers for residential customers.

In recent remarks, entrepreneur and philanthropist Bill Gates called for “energy miracles” to meet the threat of global climate change.  But we at COMPETE would submit that with or without divine intervention, organized competitive markets have become incubators of technological innovation and renewable energy that meet rising demand with efficient clean energy generation.

“COMPETE believes a market-based approach to reducing greenhouse gas emissions and producing clean electricity offers the most innovative and economically efficient means of addressing climate change,” said Federico Peña, COMPETE Coalition Co-Chair and former U.S. Secretary of Energy.

Following the Senate’s confirmation last week of former Iowa utility regulator John Norris to a seat on the Federal Energy Regulatory Commission (FERC), we were encouraged to hear him say he would “work toward ensuring open and fair energy markets in which consumers, retailers and wholesalers can have confidence.” His prepared statement further noted challenges ahead including “minimizing the impact changes will have on consumers, ensuring adequate investment in upgrading and building new infrastructure and meeting our nation’s goals for reducing CO2 emissions.”

A celebration of sorts is underway as businesses in Illinois note the positive change and successful results that have emerged since the state’s General Assembly passed legislation opening electric markets to competition a decade ago. In a letter to the editor in the Daily Herald, Tom Wolf, director of the Illinois Chamber of Commerce’s Energy Council, said that businesses are reaping the benefits of a competitive marketplace with competition spawning a new industry and creating new opportunities.

“Fair, transparent, open and efficient competitive markets are what we really need to emphasize in this country,” Jon Wellinghoff, Chairman of the Federal Energy Regulatory Commission, said at a recent energy policy forum examining how to meet energy demand while reducing carbon emissions. “I think if we did that in a comprehensive way a lot of these problems would take care of themselves.”

The facts support Chairman Wellinghoff.

Promising news today for Maryland’s electricity customers. Dereck Davis, the House of Delegates chair of the Economic Matters Committee, will vote against any proposals to re-monopolize Maryland’s electricity industry, according to a report in the Maryland Gazette. The paper quotes him as vowing to prevent the issue from consuming his panel’s work in the 2010 General Assembly.

“I don’t understand what this is designed to accomplish," John Shelk, President and CEO of the Electric Power Supply Association, told Platts in response to the latest effort by the American Public Power Association (APPA) to deny American consumers the economic and environmental benefits of organized competitive electricity markets.

We agree. Trotting out its tired and misleading compilation of Energy Information Administration (EIA) statistics, and continuing to conflate state-regulated retail and federally regulated wholesale power markets, APPA and an assortment of activist groups called on Congress and federal energy regulators to look into allegedly “high electricity prices” in organized electricity markets.