The rapid evolution of the electricity sector in the United States can offer numerous benefits to consumers while also addressing society’s environmental concerns. The rise of independent energy suppliers and the advancement of information technology are transforming the way we generate and manage our electricity use, allowing consumers to access more affordable, diverse, efficient, and cleaner sources of energy.
More than a dozen states have restructured their electricity markets to some degree in order to give consumers, large and small, a greater say in the type of energy they use every day to power their homes and offices. Proper policy design is crucial for ensuring that end users have the freedom to choose their service providers and are adequately protected from unscrupulous business practices.
Texas has gone the furthest in creating a dynamic retail marketplace by quarantining its legacy monopoly utilities to the operation of transmission infrastructure only. Customers can choose from hundreds of service providers based on their individual preference for lowest cost, efficiency, or renewable generation. In contrast, states with partially restructured electricity markets, which allow the old monopoly utility to continue to sell electricity directly to consumers, have often seen competition stifled.
Not all states have embraced the trend of unbundling electricity services to allow competition, however. Many states remain resistant to restructuring the electricity market to allow independent retail sales, with opponents often citing concerns over consumer protection. However, a well-designed electricity market can address these concerns.
A starting point would be the creation of regulations similar to those of Texas, separating the monopoly utility from participating in the generation and sale of power. Regulated electric utilities should focus on owning and operating the most secure and reliable transmission system possible, and leave the generation and sale of electricity to private-sector companies. This encourages maximum competitiveness and will lead to cleaner, more efficient, and affordable energy for all consumers.
Mr. Dillon, Retail electricity competition is not the only way to encourage competition for power generation and is not likely the best way to enable the transition to a low-cost… Read more »
Thank you for your comments. We share similar goals but see greater competition as a better way to achieve them. Consumers have to be the deciders when it comes to… Read more »
While there is nothing wrong with consumer choice, it will certainly not address climate change in the time allotted. Utilities currently use fossil fuels even though it is the most… Read more »
Personally, I don’t see a carbon tax as politically feasible. The fact that it’s been kicking around for a decade in Congress with no action is evidence enough of that.… Read more »
Legalizing gay marriage was seen as not politically feasible and it was kicking around for decades. Demand for a carbon tax is growing and it is moving towards the center… Read more »
Mr. Dillon, Replying to your two comments above, you are proposing a “retail electricity competition approach alone” that is extremely dangerous for our children, grandchildren, and future generations. Unhalted global… Read more »
Thank you for your response. I appreciate your concern for the future but I question whether the government and the monopoly utilities are going to deliver the energy system you… Read more »
While perfect may the enemy of the good, sometimes good is just not good enough. It’s been over 30 years since James Hansen warned Congress that we must lower emissions… Read more »
Dan, I respectfully think you made my point for me. It has been 30 years since Hansen addressed Congress and what has happened? We have an opportunity to empower consumers… Read more »
Here in Virginia we have deregulated and regulated again but not decoupled. Efficiency and onsite generation reduce centrally generated load and so reduce utility profits. In Virginia we have done… Read more »
Retail electricity markets are great for con artists but not consumers. There are the weekly ads for all green electricity in New England but at times of low wind and… Read more »
Under a reorganized market with retail choice, the ISO or RTO regulates the operation of the grid. The incumbent utility is still responsible for the transmission lines that the electricity… Read more »
Mr. Fosberg, You and I have disagreed about offshore wind before. I wrote that studies do preclude building offshore wind farms south of Virginia, but the “offshore region from Virginia… Read more »
Cost and reliability of electricity supply to consumers is an issue ill-served by an ideological bias that “small, distributed, competitive” is always better than centrally planned and controlled. Over the… Read more »
Our overall goal should be to achieve, as quickly as possible, a low carbon future that is reliable and is affordable for most people. Before even getting into discussions of… Read more »
Herschel, Thank you for your comment. You are correct that there is not one single answer to the challenge of transitioning to a low-carbon energy system. Our focus is on… Read more »