Power markets just want to be free!

A cadre of former energy regulators have issued a letter to state and national policy makers urging them to keep pushing forward in deregulating electricity markets throughout the country. This includes current Reliant Energy Executive Vice President Jerry Langdon and former Texas Public Utility Commission/Federal Energy Regulatory Commission head Pat Wood.

pat_wood Pat Wood is everywhere.

As an Associated Press story puts it:

Responding to what they see as an unwarranted raid on open, competitive power markets, a bipartisan group of former U.S. energy regulators is speaking out to tout the benefits of electricity deregulation.
Competition is under attack, and we think it really is important to voice our views,” said Betsy Moler, the former head of the Federal Energy Regulatory Commission who now serves as Illinois-based Exelon Corp.’s executive vice president of government and environmental affairs. “We are singing with one voice, and we are singing about the benefits of competitive markets.”
In several states across the country, concerns about electricity deregulation are growing as electricity prices soar. Critics blame market restructuring, and some states like Virginia have even taken steps to roll back deregulation.
…. “It is clear that a competitive electricity policy has benefited customers and has the intellectual and factual support to continue in the future,” they wrote in the May 31 letter.”


This Texas legislative session that ended this week was supposed to be heavy on changes to the competitive power markets here. The high prices Texans have seen in recent years have raised the ire of many, but the bills aimed at significant changes died. (BTW, keep an eye out for a story by the Chronicle’s R.G Ratcliffe about some of the forces behind the bills failing.)
Texas is considered the “Gold Standard” of competitive markets, according to most pro-open market supporters. The Alliance for Retail Choice, a group of retail electric companies including Reliant, released a survey this week of the state of electric competition that says as much:

Retail electricity choice is thriving in Texas and New York because the electricity market structure in those states has advanced sufficiently for competitive markets to work effectively. More than 3.7 million residential customers are being served by competitive suppliers in those two states alone.
In Texas, which recently ended its five-year rate transition for residential consumers, residential consumers can choose from over 50 distinct products — a wide array of offers including electricity from wind energy, fixed-price products for multiple years, pricing that guarantees savings in extreme summer heat, and products that encourage energy efficiency.

Repeatedly officials with TXU and Reliant, the two largest retailers in the state, have said consumers want choice and price certainty. I guess you could say we have that: there are nearly 40 plans available to residential customers living in zip code 77002 according to Power To Choose, for example, and many of them let you lock in rates for one year or more. But a few executives have said to the Chronicle in the past it was a big mistake to sell deregulation in Texas to voters based on price. Since power prices here are tied so closely to natural gas prices the spike in that fuel in recent years has led to little joy for customers.
A number of groups, including ACORN and AARP are calling on Gov. Rick Perry to reconvene a special session of the Legislature to try again on electric competition reform. AARP says Texas should change the wholesale market structure so the relatively inexpensive to operate power plants, like coal and nuclear (yes, nuclear) don’t get to charge the same rate as more expensive gas plants.
Can a tweak in the wholesale structure bring some relief consumers? How about adjustments in the retail end of the business? Or should we just keep our hands off of it? What do you think?