Is retail competition coming to YOUR territory? Quite possibly, says new study
By Jesse Berst
"The movement towards competitive electricity markets made significant progress over the past year," says Jamie Wimberly, CEO of DEFG EcoAlign, a consultancy that issues an annual retail competition report card. This year's study had several takeaways:
- Retail electricity competition grew in 2012 at an even more aggressive pace than in 2011
- Texas is the competitive retail market leader for the sixth consecutive year
- Illinois will soon have the second most customers on competitive supply
- Retail competition brings lower rates and, equally important, "a surge in product and service innovations"
The Annual Baseline Assessment of Choice in Canada and the United States (ABACCUS) identifies about a dozen areas of North America for their efforts to deliver retail competition. While Texas is the leader, the report recognizes New York, Illinois, Pennsylvania, Connecticut, Maryland and the Canadian province of Alberta for policies that foster choice for electricity customers.
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Jesse Berst is the founder and chief analyst of Smart Grid News.com, the industry's oldest and largest smart grid site. A frequent keynoter at industry events in the U.S. and abroad, he also serves on advisory committees for Pacific Northwest National Laboratory and the Institute for Electric Efficiency. He often provides strategic consulting to large corporations and venture-backed startups. He is a member of the advisory boards of GridGlo and Calico Energy Services.
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HOUSTON â€“ December 17, 2012 â€“ Consumers in areas of North America that have opened their electricity markets to retail competition have seen a surge in product and service innovations compared with consumers in areas where electricity remains a commodity delivered by monopoly providers, according to the Annual Baseline Assessment of Choice in Canada and the United States (ABACCUS) released today by Distributed Energy Financial Group LLC (DEFG), a management consulting firm specializing in energy and helping clients better connect with customers.
â€œRetail electricity competition grew in 2012 at an even more aggressive pace than in 2011. Competition has prompted retail energy providers to deliver lower prices and a greater number of innovative energy offers for consumers. The overall results include record numbers of customer engagement and a better alignment of customers with the services they prefer. For commercial and industrial customers, retail competition also continues to mean better global competitiveness,â€ said Nat Treadway, DEFG managing partner and lead author of the report.
The ABACCUS report identifies about a dozen areas of North America for their efforts to deliver retail competition. Texas is recognized as the competitive retail market leader for the sixth consecutive year. New York, Illinois, Pennsylvania, Connecticut, Maryland, and the Canadian province of Alberta are also acknowledged for their policies that foster choice for electricity customers. These areas have vibrant markets with numerous retail energy suppliers and numerous service choices for customers of all sizes.
â€œIn Texas we refuse to rest on our laurels and have every intention of remaining number one by continuing to add features in our nationâ€™s leading electricity market,â€ said Donna L. Nelson, chairman of the Public Utility Commission of Texas. â€œWe keep finding ways to increase customer value in the marketplace through smart grid innovations and ongoing improvements in the shopping experience, just to name a few.â€
The ABACCUS report also identifies several areas of North America for their efforts to further enhance retail competition in 2012 and beyond. Alberta, Pennsylvania, Illinois, and Ohio all made noticeable advancements during the year.
â€œThree years ago, the expiration of long-term rate caps jump-started retail electric competition in Pennsylvania,â€ said Pennsylvania PUC Chairman Robert F. Powelson. â€œSince then, the PUC has been working diligently to improve the competitive markets in Pennsylvania. More than 1.9 million customers, representing 59.4 percent of the electricity being used in the state, currently are shopping for their electricity. In the coming year, we will be moving forward with recommendations that have grown out of our Retail Markets Investigation.â€
â€œApart from Texas, Illinois will very soon have the most customers on competitive supply, with more than 50 suppliers competing against each other, including more than 30 suppliers offering service to residential customers,â€ said Illinois Commerce Commissioner Erin Oâ€™Connell-Diaz. â€œWith the City of Chicago aggregating about 900,000 customers, in two or three months, close to three-quarters of all residential customers will be receiving their power and energy from a competitive provider. Illinois competition is delivering a full menu of options to all classes of customers.â€
DEFG develops ABACCUS scores and rankings based on data available in the market. ABACCUS provides a baseline for building a properly functioning competitive energy market. Copies of the full report are available at www.defgllc.com.