NATIONAL CENTER FOR POLICY ANALYSISTurning on the Lights 2011: The Consumer

Benefits of Electric Power Competitionby Carl Johnston and Lynne Kiesling April 2011

Cal-ISO

ERCOT

NE ISO

PJM

MISO

Alabama

Arizona

Arkansas

CaliforniaColorado

Connecticut

Delaware

Florida

Georgia

Idaho

Illinois Indiana

Iowa

Kansas

Kentucky

Louisiana

Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

NebraskaNevada

NewHampshire

New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

WestVirginia

Wisconsin

Wyoming

United States

0

0 100 Km

100 Miles

Hawaii500 Miles

0 500 KM

0

Alaska

0 500 Miles0 500 Km

NY ISO

U.S. Independent System Operators (ISOs)/RTOs

SPP

Restructuring States Pre-California Crisis

Alabama

Arizona

Arkansas

CaliforniaColorado

Connecticut

Delaware

Florida

Georgia

Idaho

Illinois Indiana

Iowa

Kansas

Kentucky

Louisiana

Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

NebraskaNevada

NewHampshire

New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

WestVirginia

Wisconsin

Wyoming

United States

0

0 100 Km

100 Miles

Hawaii500 Miles

0 500 KM

0

Alaska

0 500 Miles0 500 Km

Restructuring States Post-California Crisis

Texas Fast FactsCompetitive Sourcing:43% of Residential>70% of Industrial

In Houston, choice between 255 plans a five-fold increase from a year ago.

http://www.powertochoose.org/_content/_compare/showoffers.aspx

255 Offers

Zero to 13.7c KWh

• Promotions• Month-to-Month• No Credit Req’d• Daily Variable Rate• GoGreen!• 6-12-18-Month

Fixed

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110.000

2.000

4.000

6.000

8.000

10.000

12.000

Real Prices ($2008)Natural Gas

Texas Electricity Retail Price per KWH 1990-2011 ($=2008)

19901991

19921993

19941995

19961997

19981999

20002001

20022003

20042005

20062007

20082009

20102011

0.000

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

New Jersey Real Electricity Prices 1990-2011

"Real Prices($2008)"Natural Gas ($2008)

Axis Title

1990199119921993199419951996199719981999200020012002200320042005200620072008200920102011

-2

0

2

4

6

8

10

12

14

16

DifferenceRestructured Non-CongestedRestructured Congested

Prices In (Non) Congested States 1990-2011

Revolution in Generation

• Nukes in restructured states are 40% more efficient

• Renewable power output growing 20 times faster in restructured states

• (fair access to grid; wholesale response to intermittent output)

Revolution in Distribution

• Smart Meters: 28 million households with smart meters permitting two-way communication

• Digitization of the Grid paves the way to connections to the Internet

Revolution in Consumption

• Buyer or seller of production• Optimization of electricity use throughout the

day using “operating system” for your home.• Self sufficient micro nets and community

networks

Revolution in New Businesses

• Demand Response Aggregators• Networked Appliances• PHEVs• New Software and Device Development

Opportunities (Applications running on home operating systems)

Policy Recommendations

• Split vertically integrated utilities into service companies and power generators, allow free pricing nationwide

• Deregulate the utility market to provide choices for length of contract, fuel options, reliability—let consumers lead the market

• Give FERC Authority to Site Long-Distance Transmission Lines (or something similar)

• Divest Federal Power Generation and Transmission Assets• Build Smart Grid

• Junk Preferences for Generation Technologies

199019911992199319941995199619971998199920002001200220032004200520062007200820090.000

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

Real Prices ($2008)Natural Gas ($2008)

California Real Electricity rates 1990-2011 ($=2008)