Competitive Electricity Markets Help Achieve Clean Energy Goals

Competitive electricity markets are achieving the clean energy and green jobs goals being discussed at today's Clean Energy Economy Forum in Saginaw, Michigan.  The event, featuring Gov. Jennifer Granholm and Obama administration officials, is focused on the economic benefits of expanding the use of solar, wind and other clean energy technologies. 

“Competitive markets are already facilitating the very outcomes that are the focus of today’s event.  Investment in cleaner and innovative technologies will prosper from the clear and transparent price signals delivered in competitive markets,” said William L. Massey, former Federal Energy Regulatory Commissioner and counsel to the COMPETE Coalition.

“Competition is already delivering on this promise. Last year, more than 80 percent of the wind energy capacity installed was in organized electricity markets. Overall, regional competitive electricity markets host nearly three-quarters of all installed wind energy capacity nationwide — despite the fact that only 44 percent of wind energy potential is found in these areas,” continued Massey.

Groups like the Environmental Defense Fund (EDF) are making the connection.  EDF recently joined with COMPETE in highlighting the beneficial relationship between competitive electricity and a market-based cap-and-trade program to control greenhouse gas emissions. The joint statement noted that, “Market forces will ensure that investments are made in the right places with cleaner, more efficient and innovative technologies. For that reason, we believe that well-structured competitive electricity markets offer the most benefit to consumers, our economy and the environment.”

For instance, a pilot program to facilitate plug-in hybrid electric vehicles, a key topic of today's discussion, is under way at PJM Interconnection, one of the nation's organized competitive electricity markets.

Given the connection between competition, innovation and cleaner energy, Massey noted the irony of holding the event in Michigan, which has mandated 10 percent limit on competition for electricity. The reintroduction of monopoly protections for the state's utilities was enacted in a controversial 2008 state law and is already limiting the ability of consumers to access lower-cost and innovative alternate suppliers.

“When it comes to energy, we need as many good ideas as we can get.  Limiting competition effectively shuts down the innovation pipeline and will only hurt consumers and our economy in the long run,” concluded Massey.  “I hope that legislators in Michigan and all across the country pay heed to the clear evidence that well-functioning competitive markets offer the best avenue for meeting our nation’s energy, economic and environmental goals.”