Retail Power Choice: Myths vs. Facts

November 15, 2021

California, Connecticut, Delaware, Federal, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, Montana, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Texas, Virginia, Virginia, Washington DC, Wisconsin

More than twenty years ago federal regulators adopted rules promoting competition in regional wholesale electricity markets and the first states adopted programs to promote competition in retail electricity markets. These reforms congealed in the 1990s with considerable momentum nationally for competition in electricity—that is until the well-intentioned but poorly-conceived market restructuring in California imploded. This prompted a number of states to reconsider opening their retail markets to competition.  To their credit, 13 states and the District of Columbia persevered, adopting electricity market restructuring programs that avoided the pitfalls of California and benefited the interests of consumers and the overall economy along with the environment.  To date, there continues to be limited awareness and sometimes misinformation among consumers and policymakers both within the competitive jurisdictions and in the “monopoly” states themselves about the benefits from having a restructured market that enables competition and customer choice.  At this point we now have a strong data set of two decades’ experience and are able to compare these two sets of states side-by-side.  With this information, RESA has gathered the facts that challenge many of these false assumptions and is sharing the common myths versus facts about retail power competition and customer choice.

As we move forward in the third decade of the 21st century, it makes little sense to cling to a monopoly regulatory model for electricity that is a vestige of 19th century economic thinking and a barrier to the efficient clean-energy economy that consumers and policymakers seek to embrace.   The bottom line is that consumers want and expect choices. They have them in nearly every other area of their lives. That is why there is a dizzying array of colorful options as we walk down the aisle of our neighborhood grocery store.  That’s why automobiles come in numerous and customizable configurations and colors, and why we have innumerable telecommunications options beyond the old black rotary phone that prevailed under monopoly regulation. Competition is at the heart of our economy and way of life everywhere—except for electricity supply.

 

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Together with our members, we play a critical role in educating key stakeholders and are active in support of or opposition to bills that affect competitive electricity markets, consumers, and RESA initiated legislation.

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