Posted by: marilynshowalter | June 26, 2007

Playing Soccer on a Peruvian Plateau

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. Read More…

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Posted by: marilynshowalter | June 25, 2007

Happy Talk Does Not Equal Happy Prices

The ISO RTO Council (IRC) has established a website, complete with “Myths and Facts” and “10 Reasons ISOs and RTOs are Good for North America.” This happy talk has so much spin that it will take some time to slow it down, deconstruct it, and fully respond. Readers may want to respond to individual points, but I will begin with a single set of “facts” IRC uses to respond to its own Myth #1. Read More…

Posted by: marilynshowalter | June 22, 2007

SnoPUD v Enron, Round Umpteen, $1.6B+

Snohomish County Public Utility District has just won a major battle in a long war against Enron over a power contract that is a piece of the Western energy crisis. Read More…

Posted by: marilynshowalter | June 21, 2007

Terminology Ambiguity: “Deregulation” and “Competition”

As part of today’s unveiling of potential reforms of organized regional electricity markets, FERC Chairman Joe Kelliher includes a brief but useful discussion of the terms “deregulation” and “competition.” These two words are indeed vexing, because of the variation in their literal, technical, legal, and popular meanings. As a result, their use can carry considerable ambiguity, confusion, and exasperation.

The popular meaning of “deregulation,” in this context, is price-deregulation. That is, electricity prices are not specifically and precisely set in a tariff approved by a regulator. When we say the trucking, airline, and telecommunications industries have been “deregulated,” we mean that prices aren’t set by a regulator, not that those industries aren’t otherwise regulated. Similarly, the food industry is heavily regulated but prices are not. Read More…

Posted by: marilynshowalter | June 20, 2007

New Math for New England and New York

Former U.S. Senator Don Nickels, Chairman of the Compete Coalition, touts the annual reports of ISO New England and the New York ISO because “prices fell by 20 to 30 percent in most areas in New York, and in New England the average wholesale price of electricity fell 21 percent.” Nickles asserts that these and other studies offer “clear and compelling evidence that competitive markets produce consumer benefits, including in the area of price.”

Really? The ISO reports themselves concern wholesale prices, not retail prices to consumers. In the previous post, I’ve shown the retail price-trends for New York, compared to those in regulated states. Here are total delivered retail prices for all six New England states, compared to prices in the regulated states. (Although Vermont is regulated and ordinarily is shown with the regulated states, in this graph it is included with the other New England states.) As you can see, the gap has roughly tripled in recent years.

New England Price Trends - total

These trends are similar for all classes of customers.  In order for this widening gap to be a “benefit,” one must accept Nickles’ implicit argument that the price-gap would have been even greater had New England remained regulated, despite its relatively parallel path, when it actually was regulated (in the 90s), to prices in the other regulated states. This might be his position, but it is not a clear and compelling one.

For more comparative price-trend graphs, visit PPI’s website.



Posted by: marilynshowalter | June 17, 2007

ABACUS: Did they use one?

A recent study using the acronym “ABACUS” claims that Texas and New York are the best examples of effective competitive electricity markets. Sponsored by the Alliance for Retail Choice, the authors selected 28 states and two provinces, and ranked them from best to worst, basing their assessment on factors such as number of providers, switching rates, nature of default service, etc.

Interestingly, price to consumers was not one of the ABACUS assessment factors. What if it had been?

Here are the total delivered retail electricity prices of ABACUS’s “best” five states (the blue line–TX, NY, MD, ME, and MA), compared to the prices in ABACUS’s chosen bottom or “worst” five states (the black line–WA, NV, NC, LA, and GA). As you can see, ABACUS’s top-ranked states are also top-priced, and the gap has widened.

 

ABACUS Top Five v Bottom Five States

ABACUS used only 28 states in its study. Over at PPI’s website, I have tracked prices in all states, dividing them into “regulated” and “deregulated” (CA, CT, DC, DE, MA, MD, MI, NH, NJ, RI & TX). Here, for example, are the total delivered retail electricity prices to consumers (all classes) in Texas–compared to prices in the regulated states:

151a_image001.gif

And here are New York prices compared to prices in the regulated states:

151a_image0011.gif

For many more permutations, including price-comparisons for residential, commercial, and industrial classes, go PPI’s states map and aggregated charts.

Posted by: marilynshowalter | June 13, 2007

Welcome!

Welcome to PPI Forum! This is a blog for civilized discussion of electricity regulation, particularly “deregulation” and “restructuring” issues. Please stop by frequently. Posts will begin soon.

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