Solar power

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.
 

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. 

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.
 

Clean energy generation has grown at a phenomenal pace in the PJM Interconnection market.  Data from PJM’s Environmental Information Services’ (EIS) tracking system shows that over the past five years, wind generation has increased almost 1,300 percent, from 500,000 megawatt-hours (MWh) in 2005 to 6,500,000 MWh in 2009. Solar power, which accounted for only 100 MWh in 2005, produced more than 81,000 MWh – a 3,000 percent increase.

This infusion of clean energy has reduced PJM’s carbon dioxide emissions per MWh of generation by 12 percent since 2005, created green jobs, and provided customers with low-carbon energy alternatives, according to the EIS data.

Innovation and competition will play an increasingly larger role in U.S. electricity markets, predicted Chris Weston, CEO of Direct Energy. Weston kicked off KEMA’s 21^st Executive Forum with an energizing keynote address on the future of retail electricity competition in North America.

Weston comes to the U.S. market from the United Kingdom, bringing a fresh perspective to our domestic competition discussion by comparing and contrasting the U.K.’s competitive market system with ours. Personally, I have been active in the U.K.’s competitive market for the past three years and can attest to its development and the sense that the British energy market is five to seven years ahead of U.S. 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.

The benefits keep accruing for Texas as the state’s competitive electricity market continues to develop. Fast on the heels of a recent study that found Texas energy rates have fallen, news about the abundance of power suppliers and spread of solar energy underscore the fact that competition is having a positive impact on consumers.