Organized-market and deregulation enthusiasts like to claim that RTOs and retail deregulation are good for the environment because they will result in more green power. For example, as its 5th of “10 Reasons Why ISOs and RTOs are Good for North America,” the ISO-RTO Council explains that green power will be added to the grid because “ISO/RTOs level the playing field for diverse types of power plants to compete to bring the lowest cost electricity to consumers.”
But what if the playing field is artificially high? If market or auction clearing prices draw more money from consumers than necessary, most of which is not directed to green power, dollars that could be spent on green power (or on other needs of consumers) become unavailable. In a cost-based regulated system, on the other hand, the costs of (and regulated profit on) existing plants are covered but not exceeded. When new resources are added, new consumer dollars cover (but don’t exceed) the costs of the new plant.
There is evidence that some fields are up in the Andes, and a reader worries in the following Comment that even higher elevations lie on the hike ahead.
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