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Compete Coalition Tarnishes Brand by Wading into Texas "Reliability" Fight
The Compete Coalition has tarnished its reputation, and damaged its ability to advocate the introduction of retail choice to new markets, by wading into the Texas debate over "reliability" (meaning resource adequacy), and lending credence to the view -- oft-cited by critics of restructuring -- that the Texas market design has led to the potential for the lights to go out.
As discussed in our related story today, Compete has bizarrely started to air a radio ad in Texas with the following script:
"It's no secret that the Texas economy is growing fast, adding families, jobs and businesses. That's good.
But energy experts predict Texas electricity demand will see double-digit growth in the next decade. And electric supplies are not keeping pace. That's bad.
This could lead to power shortages that are not good for Texas families or businesses.
Fortunately, experts at the Public Utility Commission of Texas are working to encourage more energy resources in Texas through the competitive electricity market. Including new resources that will use clean-burning natural gas produced right here in Texas.
Let's support the Texas Public Utility Commission's work to strengthen the competitive electric market. Improve reliability. Encourage the electric resources Texas needs to power jobs and opportunity. And keep the lights on.
For more information go to CompeteCoalition.com."
We readily concede the Compete ad does not explicitly advocate a certain position with respect to Texas' "reliability" debate (though branding the issue as one of "reliability" itself speaks volumes).
However, whatever policy Compete ultimately supports in Texas, if any, is immaterial; the ad itself, and framing the issue as the ad has, does serious damage to the cause of competitive markets across the United States.
Texas is unequivocally the gold standard when it comes to both wholesale and retail competition, and as more states either consider adopting retail choice (Arizona), or reforming their current market design (Pennsylvania et. al.), it is the Texas model which is most often cited by market participants as the model to follow.
But Compete has given a huge amount of ammunition to opponents of competition, and specifically the Texas model, by essentially admitting that the Texas model has put Texas customers at risk for blackouts.
While not using the word "failure," it's hard for any rational person listening to the ad to conclude that Compete thinks the current Texas system is working.
The ad says that, "electric supplies are not keeping pace," with demand increases, and laments this development as "bad."
The ad further engages in rhetoric that, "This could lead to power shortages that are not good."
If we were running the opposition to electric restructuring in a currently vertically integrated state (Arizona, Indiana, Wisconsin, etc.), the next time the PSC or legislature gets a letter from Compete's "members," we know what we'd do immediately.
We would pillory Compete with this ad which says that Texas deregulation has led to a situation where "electric supplies are not keeping pace" and that Compete has even conceded that the Texas deregulation model, as it currently stands, "could lead to power shortages that are not good."
If even Compete is conceding these failures of Texas deregulation, why would any vertically integrated state wish to embark upon electric restructuring, we'd say, as opponents of competition.
This, indeed, has already happened with capacity owners. Specifically, in the Arizona retail access proceeding, opponents of retail choice seized on the fact that, in Texas, capacity owners are warning of rotating outages unless load is compelled to pay tribute to capacity owners through administrative capacity payments. Arizona opponents questioned why, given these risks of blackouts readily cited by Texas capacity owners, Arizona would want to adopt such a risky proposition such as electric choice.
Now the Compete Coalition is exposed to the same attack. By inserting itself into the Texas "reliability" debate, with the specific language in its ad, Compete is only feeding the narrative that, due to the design of its restructured electric market, Texas is facing power shortages, which poses threats to public health and safety and risks Texas' continued economic development (a narrative we wholeheartedly reject as unsupported).
As a result, Compete has just made it infinitely harder for itself, or anyone else for that matter, to expand retail choice to new states. One must wonder, then what is the motivation for Compete to, now all of a sudden, insert itself into the Texas "reliability" debate, and how this serves the interests of its full 700+ members.
This question is examined in our related story today (click here)
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October 4, 2013
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Reporting by Paul Ring • ring@energychoicematters.com
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