New ABACCUS Rankings of Retail Markets Show New York Falling Behind

New York has lost its position as the second-highest ranked state for a competitive residential retail electric market under the latest Annual Baseline Assessment of Choice in Canada and the United States (ABACCUS), providing a cautionary vision of markets which flirt with, but ultimately fail to adopt, fundamental changes in default service structure.

The ABACCUS report, authored by Distributed Energy Financial Group LLC (DEFG), is a scorecard that tracks U.S. states' and Canadian provinces' progress in restructuring electricity markets.

The 2012 rankings for the residential market are:

2012 Residential ABACCUS Scores and Rank
                    2012  2012  2012          2011
                   Score  Rank  Assessment    Rank
Texas                 86   1    Excellent        1
Alberta               66   2    Good             4
Pennsylvania          64   3    Good             3
New York              62   4    Good             2
Connecticut           55   5    Good             5
Maryland              55   6    Good             6
Illinois              52   7    Good             7
Ohio                  49   8    Good            10
Maine                 47   9    Good            11
Ontario               45   10   Marginal         9
Massachusetts         43   11   Good             8
New Jersey            43   12   Marginal        12
District of Columbia  39   13   Marginal        13
Delaware              35   14   Marginal        17
New Hampshire         33   15   Marginal        14
Rhode Island          33   16   Marginal        16
California            29   17   Unsatisfactory  18
Michigan              28   18   Unsatisfactory  15

Texas again retains its top spot as the leading residential retail market.

Alberta, which previously completed a scheduled transition to 100% spot-based default service, jumps to second in the 2012 residential rankings, followed by Pennsylvania which is examining certain (modest) changes to the length of default service procurements.

New York, which once seriously rivaled (in some stakeholders' minds) Texas as the nation's top competitive electric market, has fallen to fourth, and is in danger of falling further in next year's rankings given gains by competitive markets in Illinois and Ohio, while New York has raised the possibility of ending certain bedrock principles which made it the second-best market in the nation (namely, non-recourse purchase of receivables).

The New York experience portends what happens when retail market structure stagnates, and does not remove inherent barriers to customer choice, such as utility-supplied default service. New York was once the hot market on the brink of removing utility-supplied default service, with a policy statement generally favoring a merchant function exit for utilities, and serious consideration of a retail auction at NiMo.

States currently considering such retail market barriers, namely Pennsylvania, should take the New York experience into consideration, especially since Pennsylvania has already tried once -- and failed -- to maintain a short-term market-based default service procured by the utilities, with such market-based default service replaced with the current "prudent mix" standard enshrined in law.

Texas again leads the ABACCUS commercial and industrial market rankings

The complete C&I rankings, as well as the full ABACCUS report, can be found on DEFG's website (click here)