FERC/NARUC Competitive Procurement Collaborative -- Comments of the COMPETE Coalition

Federal Energy Regulatory Commission
National Association of Regulatory Utility Commissioners 

Competitive Procurement Collaborative

Comments of the COMPETE Coalition
On the July 2008 Competitive Procurement Study

The COMPETE Coalition appreciates this opportunity to comment on the July 2008 study prepared for the Competitive Procurement Collaborative by Analysis Group titled “Competitive Procurement of Retail Electricity Supply: Recent Trends in State Policies and Utility Practices.”  The COMPETE Coalition represents more than 260 electricity stakeholders, employing more than 7 million American workers, which include customers, demand response providers, renewable energy companies, suppliers, generators, transmission owners, trade associations, and economic development corporations – all of whom support well-structured competitive electricity markets for the benefit of consumers. 

COMPETE salutes the FERC and NARUC for their leadership in addressing the issues confronting competitive procurement of electricity resources.  Given the massive investment needed for new electricity infrastructure, the discipline and transparency of competitive processes are imperative to ensure that the nation meets this challenge with the wisest use of our resources.

As the study observes, competitive procurements “can provide utilities with a way of obtaining electricity supply that has the 'best' fit to customers needs at the 'best' possible terms.”  COMPETE could not agree more.  Competition is the bedrock of our nation’s economic prosperity and stability. Well-structured, competitive electricity markets produce important benefits for consumers: improved price signals; more downward pressure on prices as contrasted with prices charged in fully regulated markets; new infrastructure investment; enhanced reliability; better demand management; more effective conservation and energy efficiency; increased supply options, new market entrants, innovation and technological advancements; and improved environmental performance.  Through surveys, letters and phone calls, COMPETE’s customer members indicate that they experience firsthand how competition results in innovation and lower costs in their businesses, and they want the same competitive discipline in their electricity service, where risk in borne by suppliers and not the customers.

The Analysis Group’s study does an excellent job of identifying the criteria that should be used for competitive procurement processes as well as other design and implementation issues.  As such, it is an exceptionally valuable foundation for the collaborative’s important work that lies ahead. 

COMPETE urges the leadership of the collaborative to use the Analysis Group’s study to develop workable procedures for competitive procurement and for all states to adopt competitive procurement processes for electricity resources.  Competitive procurement will be a critical tool in meeting our nation’s large electricity resource needs.

Submitted on behalf of the COMPETE Coalition,

Ron Kirk and Don Nickles
Co-Chairs, COMPETE Coalition