Renewable energy

Pennsylvania’s competitive electricity market crossed a major milestone this week, with 1 million customers actively shopping and choosing their electricity provider. Since rate caps expired across the state at the beginning of the year, nearly 300,000 new accounts were established, the clearest indication yet that Pennsylvania customers are embracing competition.

Maine’s competitive electricity market is thriving, evidenced by several recently announced economic and environmental initiatives creating benefits for the state’s consumers.
 

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 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.”

KEMA – a leading global energy and utility industry consultancy – will examine key business and policy issues facing retail energy markets at a two-day forum on March 30-31 near Dallas, Texas. The forum will convene key stakeholders in the U.S. retail energy industry and feature industry executives, state and federal regulators, investors and energy buyers - including several COMPETE members.

The conference – KEMA’s 21^st Executive Forum: Change through choice – will focus on the current state of retail energy competition and where it is headed in the future. Industry leaders will discuss the strategic issues facing evolving energy markets and the impact on retail customers. Participants will also explore technological innovations and advancements in renewable energy.

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.

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.

A lively panel discussion dedicated to the question of whether a change in regulatory structure is needed to power a new clean energy economy helped kick off the National Electricity Forum, an annual confab co-sponsored by the U.S. Department of Energy and the National Association of Regulatory Utility Commissioners, an association representing state utility regulators. Regulators, environmentalists, policy influencers and other panelists roundly pointed to market competition as the answer.

To inspire innovation in the electricity industry and jumpstart a clean energy economy, “We need to start turning the conversation around to markets,” declared Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission (FERC).

A recent proposal by California’s Administrative Law Judge (ALJ) would settle a dispute between utilities, competition supporters, and consumer advocates by raising the state’s limit on retail power market shopping by 8,354 megawatts (MW). This compromise follows recent legislation that broadened the scope of retail power competition in California, and is but a step in the right direction.

According to the proposal, the cap on retail power shopping will be raised by 3,946 MW each in the Southern California Edison and Pacific Gas and Electric service territories, but only by 462 MW for San Diego Gas and Electric’s consumers. The proposed increases are equal to 10 million megawatts of annual use across the state.  Compare that number to recent data pegging California’s total retail electrical sales at more than 268 million megawatt hours per year.  The proposed increase in shopping is only equal to 6 percent of the entire load served, and is less than annual demand variations due to weather and economic swings.

Beware of organized competitive electricity market critics who claim to speak for all consumers. They certainly do not speak for the growing contingent of COMPETE customer members who are helping communicate the economic and environmental benefits, and the technological innovation, that competition in electricity is delivering.

During a recent conference sponsored by Citizens for Pennsylvania’s Future (PennFuture), two representatives of COMPETE’s roster of customer members, manufacturer Leggett & Platt and retailer Wal-Mart, discussed how electricity competition saves money for consumers, stimulates renewable energy, and encourages innovation.