Comments on: Another Waxman-Markey blemish: reinforcing the obsolete utility business model

By: NEMA Currents Blog

NEMA Currents Blog — Thu, 02 Jul 2009 17:10:09 +0000

[...] Lynne Kiesling (smart-grid proponent and a supporter of emissions trading) of Knowledge Problem weighs in with her concerns while Cowen contributes to the discussion on the potential threat to free-trade [...]

By: lkiesling

lkiesling — Mon, 29 Jun 2009 15:24:46 +0000

Tom,

I have a pretty stringent definition of what constitutes successful competition, and it includes rivalrous retail competition for residential customers. Texas is the only state that meets that criterion in the US. Other states like NJ, IL, NY, OH, PA, MD, MA, have administrative rules or programs that interfere with that rivalry, such as default contracts or standard offer service (built on multi-year long-term wholesale procurement contracts) that essentially constitute an entry barrier for suppliers who might otherwise come in and compete for residential customers.

You are right, it’s shades of gray.

By: O

Sat, 27 Jun 2009 22:36:29 +0000

Also, excellent point on the fixed-portion rebates or credits creating inefficient price signals for wire distribution capacity. And I agree that W-M perpetuates this state to LDC to customer vertical integration at the expense of electricity retail innovation, but the electricity distribution price regulation that already exists–given that it so completely separates distribution and generation (which I think is the result of the SO2 trading that came out of the acid rain act?) seems so well embedded, I’m not sure it would have ever changed even without Waxman-Markey.

By: O

Sat, 27 Jun 2009 21:16:47 +0000

Couple of municipal utility directors commented that they probably wouldn’t give a lump-sum rebate to customers, but would rather reduce retail electricity prices, which I suppose would mean that customers aren’t going to get that price signal to consume less–but they will pay more for other goods.

Seems that whether or not one agrees with the free distribution of allocations to LDCs (or w/ the bill in general), it just doesn’t seem like the regulatory mechanisms exist in current law to allow the federal gov. to ensure lump-sum rebates.

By: D.O.U.G.

D.O.U.G. — Fri, 26 Jun 2009 01:50:18 +0000

Nice rant, well said. I hadn’t been paying much attention, but you’re right about the locking down of the old industry structure. Thanks for the wake-up.

By: Tom K

Tom K — Thu, 25 Jun 2009 16:50:34 +0000

I advise organizations in terms of their energy purchasing and other energy efficiency programs. We operate in every deregulated state. You’re blog has been a great resource for progressive thinking in energy economics and policy. I find many of them to benefit from the competition and would consider many of them successful so I’m interested in what makes Texas “the only state in the US that has created a successful and competitive retail electricity market.”