Arizona Staff Releases First Research Report On Retail Electric Choice
Staff: "Appears" That "Reserves" (Capacity) Not "Valued Appropriately" In ERCOT
October 30, 2019 Email This Story Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
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Staff of the Utilities Division of the Arizona Corporation Commission have filed the first retail electric competition research submission
The initial, interim report contains a summary of findings to date regarding retail competition in other jurisdictions, with a review of state-specific information (including a regulatory timeline, historical prices, and the description of significant issues faced in the state, if applicable) and electric market information and a comparison average pricing across states for various years from 2000 to 2017
Staff said that its research is ongoing and the first interim report should be viewed as a work-in-progress.
"[T]he report is not intended to be read as a single narrative, but to be used as a reference representing a recapitulation of information available," Staff said
"The report makes no determination on the value of retail competition, nor does it make any recommendations for
or against restructuring the electric market in Arizona," Staff said
Of note, Staff's report states, concerning ERCOT, "Unfortunately, just as reserves aren't
valued appropriately in PJM's market, the
same appears to be happening within
ERCOT. The planning reserve margin
was at a historically low 8.6% entering
this summer and had been forecasted at an
all-time low (7.3%) in March."
Staff's report included a comparison by state of average all-in electric rates, by customer class, for the years 2000, 2008, and 2017.
Staff's comparison generally shows that all-in rates for most states which adopted retail choice were among the highest in the U.S. in 2000, prior to, or at the infancy of, implementation of choice in many of such states, and those states generally remained in such position in both 2008 and 2017, with a few notable exceptions
For example, the Texas average residential all-in rate was slightly below the national median in 2000, went above the national median in 2008, and returned to below the national median in 2017
For industrial customers in Texas, the all-in rate was slightly below the national median in 2000, went above the national median in 2008, and but in 2017 had fallen to the second-lowest rate in the U.S.
The report shows that the average commercial rate for customers in Texas, Illinois, Pennsylvania are below the national median as of 2017. All three states had commercial rates above the national median in 2000
Staff reports that, "In recent years, there has been a convergence in prices between full-service providers and competitive service
providers. This convergence has not been uniform, however, as some consumer sectors have seen greater benefits,
in terms of pricing, than others. This is unsurprising, given the difference in the costs of serving the three types of
end users. Consumers may receive other benefits beyond lower prices (e.g. budget certainty), which could not be