COMPETE Coalition Report Shows 'Stunning' Performance of Electricity Competition and Choice.
WASHINGTON, DC – Electricity choice is thriving and growing dramatically in the states that allow retail competition, and that “stunning” performance is creating pressure to provide greater freedom to electricity customers in states that have rolled back or limited retail competition, concludes a new report sponsored by the COMPETE Coalition, prepared with data and analytical support from DNV KEMA Energy & Sustainability, a leading business and technical energy consulting firm with deep expertise in competitive electricity markets.
Despite the economic slowdown and flat demand for electricity, “Not only has there been substantial growth in customer migration from traditional monopoly-regulated electric supply to market-priced energy, key indicators demonstrate electric choice growth is sustainable,” the report, Retail Electric Choice: Proven, Growing, Sustainable, finds.
“This report demonstrates that the vibrancy of competitive retail electricity is not driven solely by market prices,” said William Massey, counsel to COMPETE. “Competitive electricity suppliers provide much more than a comparatively attractive price. They are working with their customers to design contractual terms, information, innovative products and portfolio pricing to match the individual needs of customers.”
The report, based on data compiled by DNV KEMA and the U.S. Energy Information Administration, tells a compelling story. Since 2008, customer accounts served by competitive suppliers have grown more than 53%, from 8.7 million to 13.3 million in 2011. The total electricity load served competitively has grown 40% since 2008, from 488 million megawatt-hours (MWh) to 685 million MWh in 2011, an increase of nearly 200 million MWh.
“As of the close of 2011, nearly one out of every five kilowatt-hours of electricity in America was supplied by a competitive provider – even though customer choice is denied to consumers representing 56% of total U.S. electricity load,” said the report’s author, Philip O’Connor, former Illinois Commerce Commission chairman and noted expert on electricity competition issues.
O’Connor’s new analysis updates a similar report prepared for COMPETE in 2010, which found the competitive share of electricity sales volumes nationally grew from zero to 15% in the first decade since its inception, moving from a novel concept to a normal practice in the electricity business, as customers sought the flexibility and innovative pricing and services offered by competitive electricity suppliers.
The updated analysis shows a dramatic increase in switching by residential customers. “Since 2009, there has been a tremendous increase in shopping among residential customers, both through individual supply contracts and through competitive aggregation programs,” O’Connor notes in his report.
Since 2008, the total number of customer accounts served under choice arrangements grew by 53% to more than 13.3 million. Residential accounts served by competitive suppliers jumped more than 3.8 million to nearly 11 million, a 54% increase. The number of non-residential accounts served competitively increased by more than 800,000 to nearly 2.4 million – an increase of more than 50%.
“While some resistance remains to customer choice, opponents of retail electric choice now rarely argue for rolling back choice in the 18 competitive jurisdictions, as any such efforts would be strongly opposed by the many satisfied shopping customers,” the report states.
“The surge in retail electric choice and the underlying reasons for that surge warrant renewed consideration of providing access to captive customers everywhere. As competitive choice models evolve, they can serve as a basis for a transition to choice in new states seeking favorable opportunities and increased benefits for their consumers,” the report concludes.
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About COMPETE The COMPETE Coalition is more than 620 electricity stakeholders, including customers, suppliers, traditional and clean energy generators, transmission owners, trade associations, technology innovators, environmental organizations and economic development corporations – all of whom support well-structured competitive electricity markets for the benefit of our country. For more information, visit www.competecoalition.com.
About DNV KEMA Energy & Sustainability DNV KEMA Energy & Sustainability, with more than 2,300 experts in over 30 countries around the world, is committed to driving the global transition toward a safe, reliable, efficient, and clean energy future. With a heritage of nearly 150 years, we specialize in providing world-class, innovative solutions in the fields of business & technical consultancy, testing, inspections & certification, risk management, and verification. As an objective and impartial knowledge-based company, we advise and support organizations along the energy value chain: producers, suppliers & end-users of energy, equipment manufacturers, as well as government bodies, corporations and non-governmental organizations. DNV KEMA Energy & Sustainability is part of DNV, a global provider of services for managing risk with more than 10,000 employees in over 100 countries. For more information on DNV KEMA Energy & Sustainability, visit www.dnvkema.com.
Click here to read the full COMPETE Coalition 2012 report here (PDF 12MB).