COMPETE Coalition Cites Benefits of Electricity Competition for Pennsylvania Customers
The COMPETE Coalition, a national coalition that promotes the continued evolution of competitive electric markets, today outlined the many benefits of wholesale electricity markets in advance of tomorrow’s Pennsylvania Public Utility Commission hearing on the future of wholesale electricity markets.
Well-functioning competitive electricity markets in Pennsylvania have a proven track record of helping to solve today’s energy challenges by providing environmental benefits and innovative products and services at the lowest available cost, without saddling the risk of unwise investment decisions on the backs of captive consumers, as occurs under monopoly regulation. Pennsylvania consumers have benefited from increased renewable generation, growing consumer demand response, and more efficient operation of existing generation since the introduction of competitive wholesale markets in 1997.
“Regulators should hear from Pennsylvania businesses that see real benefits from electricity competition” said Joel Malina, executive director of COMPETE, expressing concern that the benefits of wholesale markets would not be discussed during Thursday’s hearing. “Many of these businesses have already asked Governor Rendell and state policy makers to support wholesale and retail electricity markets. We hope the Commission will provide an opportunity in the near future for these voices to be heard.” Malina continued.
In a letter sent last month, a group of national and Pennsylvania-based businesses opposed legislation that would extend rate caps because of the negative impact it would have on reliability and costs. Signatories to the letter to Governor Rendell included representatives from: 7-Eleven, Inc.; ACME MARKETS, a SUPERVALU Company; Best Buy Co. Inc; Big Lots Stores, Inc.; Einstein and Noah Corporation; J. C. Penney Company, Inc.; Leggett & Platt, Inc.; Macy’s, Inc.; PetSmart, Inc.; Safeway Inc. / Genuardi’s; Wal-Mart Stores, Inc.; and Yum! Brands, Inc.
“The citizens of Pennsylvania should have the opportunity to hear both sides of the story when competition and electricity policy is discussed,” said Malina.
The Electric Power Generation Association (EPGA), a regional trade association of major electric generating companies that supply wholesale power in Pennsylvania and surrounding states, joined with COMPETE in citing the importance of continuing the growth of robust competition.
”Pennsylvania’ retail rate caps, while benefiting customers for more than a decade, have now created a difficult transition to market-based rates,” said Doug Biden, President of EPGA. “The uncertainty created by a rate cap extension would discourage generators from building needed new generation. Wholesale electricity prices have been rising due primarily to higher fuel, environmental compliance, and construction costs, not because of electricity competition. Delaying the transition to a fully competitive market will create the potential for future power shortages and even higher prices, which no one wants.”
COMPETE, will continue to work with the PUC on future hearings and ensuring that customers have the opportunity to testify to the benefits of competition.
A copy of the letter to Governor Rendell can be found at http://www.competecoalition.com/files/Rendell%20Letter1008.pdf.
For more information, including examples of rate increases in vertically integrated states, please see the below:
A group of 82 signatories file comments on FERC’s ANOPR, which identified four areas for important incremental improvements in the organized wholesale power markets:
http://www.competecoalition.com/newsroom/diverse-coalition-urges-ferc-stay-course-markets
Recent examples of rate increases in vertically integrated states:
http://www.competecoalition.com/resources/recent-examples-rate-increases-vertically-integrated-states
An overview of benefits provided by well-structured, competitive electricity markets:
http://www.competecoalition.com/resources/value-competition-and-markets
