Name the State & Policy: Electric Service Is an "Essential Service" Needed for "Health, Safety" and the "Public Good"

Here's a quiz for our readers -- identify the state and policy position being argued from the following quote:

"Electric service is an essential service that is needed for health and safety, and even for the public good"

If you guessed Texas and the capacity market, while it parrots the arguments being made for a capacity market, you'd be wrong.

The above quote was actually from Tanya McCloskey, Pennsylvania's Acting Consumer Advocate, who was speaking in opposition to the elimination of a utility-offered default service. McCloskey was speaking at the National Energy Marketers Association fall leadership roundtable

Just for comparison, here's what capacity market supporters have said in Texas:

• "Importantly, electricity is not a commodity. Rather, it is an essential part of life" -- NextEra Energy Resources, LLC

• "Electricity is a different resource from other commodities" -- joint commenters including NRG Energy, NextEra Energy Resources, Exelon Generation Company, et. al.

• "Consumers have high expectations regarding electric service and electricity has become a virtual necessity for modern life in Texas" -- Exelon Corporation

• "We insure our health, homes, and cars. Insuring our power market is smart as well" -- J. Paul Oxer, Julie Parsley and Pat Wood

• "Electricity is essential to ALL aspects of the Texas economy" -- NRG Energy, including Reliant

This again illustrates the dangers of urging government intervention into a working competitive market (such as through creation of a Texas capacity "market"), because where does it stop? How can retail suppliers advocating for a capacity market in Texas, on the basis that electricity is an essential and vital service, credibly rebut the Pennsylvania OCA's argument that similar government intervention in the pricing of electricity, through utility-procured default service, is appropriate, because electricity is an essential service to Pennsylvanians?

Put another way, the insatiable desire for a capacity market in Texas, leading proponents to characterize electricity as a service so essential and vital to customers' well-being, both economically and from a public health standpoint, that it cries out for government intervention, has damaged, perhaps irreparably, the argument that safe, adequate, and justly and reasonably priced generation service can be supplied through market interactions and customer choice, the same way customers buy hundreds of other goods and services, and therefore, no government-set benchmark or target Price to Compare is needed.

While something similar to the Texas retail market model has been proposed in Pennsylvania (namely, the elimination of utility-offered default service), McCloskey noted that about 40% of Texas customers remain with the former affiliated REP, on rates no longer regulated by the PUC.

"That has significant consequences as to the affordability of what is an essential electric service in Pennsylvania," McCloskey said.

Addressing various approaches to serving poor credit and low-income customers in markets without utility-offered default service (notably the Georgia model), McCloskey said, "That approach raises fundamental questions about the affordability of what is an essential utility service." Pennsylvania's current default service model allows all customers to be served at, "an affordable price and reasonable terms," McCloskey said.