COMPETE Emphasizes Urgent Need for Competitive Electricity Markets at RETECH 2009

LAS VEGAS – Competitive electricity markets will be critical in meeting the growing demand for renewable energy, said William Massey in remarks at the RETECH 2009, a major renewable energy conference and trade show. Massey, a former FERC commissioner and counsel to the COMPETE Coalition, said the nation faces four immediate challenges related to increasing renewable energy –  upgrading infrastructure, cutting carbon emissions, remaining globally competitive and becoming energy independent – which can only be addressed through competitive electricity markets.

“Monopoly price regulation stunts the incentive for the innovation we need to make us self-sustainable and energy independent,” Massey said. “Renewable energy, conservation, efficiency and demand response technologies are easier to implement in organized competitive electricity markets. These intrinsically domestic, low-carbon resources reduce energy imports and create American jobs.”

Massey addressed pending issues like the need to cut carbon emissions, the development of renewable energy and moving toward an economy that is energy sustainable. 

“Only competition and innovation driven by market forces will move us toward sustainability while keeping us competitive in a global economy,” he said. “When it comes to implementing carbon policy, markets are more effective in achieving environmental policy objectives than traditional command-and-control regulation. Competitive regional electricity markets have already proven themselves to be the most attractive to renewable generation developers, particularly wind power.  In fact as of 2007, about 74% of wind resources were located in the RTO markets, despite the fact that only 44% of wind energy potential is found in those areas.” 

While Massey noted that the development of renewables like wind in competitive markets are outpacing development in monopoly markets, he noted the urgent need for increased capacity and transmission to accommodate new electricity – a need that can only be adequately and effectively met through a competitive market structure. 

“Upgrading and expanding our infrastructure is absolutely vital in tackling our energy challenges.  When we talk about the need to build new generation, competitive markets are providing the right framework right now,” Massey said. “Even though competitive suppliers operate only 40 percent of U.S. generation, in the last 10 years they have built the vast majority of new capacity. And, let’s not forget that during the last major electricity infrastructure build-out in the 1970s and 1980s, traditional monopolies performed poorly, shouldering consumers with excess capacity and excessive costs.”

Massey also stressed the importance of employing a market structure that promotes innovation and rapid progress, noting that returning to an outdated monopoly-regulated structure would only continue to chip away at our energy security.

Massey spoke alongside other current and former regulators on the role that renewable energy will play in the electric utility industry and the nation’s future energy market.

More information about the panel can be found at the RETECH Web site at www.retech2009.com.

Bill Massey's powerpoint presentation is attached.