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NextEra's Kelliher: "In Many States" Retail Competition A "Failure", Resulting In "Higher Rates" From Competitive Suppliers

March 6, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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In prepared written remarks before a hearing of the U.S. Senate's Committee on Energy and Natural Resources, Joseph Kelliher, Executive Vice President of NextEra Energy, Inc. and former FERC Chair, said that, "In many states, retail competition has been a failure, at least for residential customers..."

Kelliher appeared before the Committee on behalf of NextEra Energy

Kelliher served as a Commissioner at FERC, and later Chairman, during the period FERC issued key SECA orders impacting the retail market in late 2004 and 2005 (see, for example, Docket No. ER05-1423). Kelliher also presided over the introduction of forward capacity markets at PJM and ISO-NE

In his written testimony before the Committee yesterday, Kelliher stated, "In my view, wholesale competition policy has been a major success. The same cannot be said about retail competition. Retail competition has largely been limited to states that historically had very high retail rates, with the exception of Texas, where consumers are mandated [sic] to choose a competitive supplier. In many states, retail competition has been a failure, at least for residential customers, resulting in higher rates from competitive suppliers than the rates charged by regulated utilities. Perhaps because of these outcomes, participation by residential consumers in retail programs has been declining since 2014. The real beneficiary of these retail programs appears to have been industrial and other large customers."

While pedantic, we note that no customer in Texas is mandated to "choose" a competitive supplier (though they must be served by a competitive supplier as no monopoly provider exists). Texas customers may, and have, continue to take service from their legacy retail provider without making a choice

The Committee had convened the hearing, "to examine the electricity sector in a changing climate."

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