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NEM: ESCOs Have Saved New Yorkers $10 Billion Over Last 16 Years

September 19, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

ESCOs have saved New Yorkers, across all customer classes, over $10 billion over the last 16 years, the National Energy Marketers Association said in testimony in the New York PSC's evidentiary review of the retail energy mass markets

Specifically, using EIA data, NEM calculated that, aggregating all customer classes (including C&I) over 16 years (2000-2015), ESCOs’ customers on average paid at least $10 billion less across all service categories than they would have paid using the average statewide IOUs’ prices

"By eliminating local utilities’ monopoly on energy supply and introducing competition into the marketplace, ESCOs have lowered energy costs for all New Yorkers and put billions of dollars back into the pockets of New Yorkers," NEM said in testimony

NEM further calculated the value provided to ESCO customers from various additional services or specific products, such as renewable energy and fixed rates

NEM testified that a 25% penetration of renewables in the ESCOs’ supply mix (the current statewide penetration), including renewable energy credits, "results in approximately $450 million in climate change benefits for ESCO electric customers every year."

"ESCOs provide an additional $55 million annually in climate change benefits that relate to residential natural gas products that they serve assuming a similar penetration of carbon offsets for the natural gas that ESCOs supply," NEM said

"By providing energy conservation benefits, ESCOs provide New Yorkers value in the form of both monetary savings as well as environmental benefits. If ESCO customers are able to reduce their usage by 20%, this would result in savings of over $550 million – (about $300 million per year for residential electricity customers and $270 million for residential natural gas customers)," NEM said

"By providing fixed-price programs, ESCOs provide New Yorkers value that I measure at approximately 2.5 cents per kWh of the supply-side charge, which would translate to a value of approximately $125 million in 2015 alone if only half the residential sales are fixed-rate products. Applying similar analysis and assumptions to all ESCO customers, the value realized would be almost $1 billion every year," NEM's witness said

"Finally, I estimate that local utilities are adding about 4% of their energy-supply costs to the distribution charges they collect from ESCO customers. I estimate this amount to be approximately $300 million over the 16-year EIA data period," NEM's witness testified

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