On March 29, the Electric Power Supply Association hosted its first Competitive Power Summit in Washington, DC. Leaders from across the competitive power market discussed the key issues facing the sector, including maintaining reliability as the grid changes, market innovations, advancing decarbonization, ensuring a just transition with continued customer and economic benefits, and future market design. While there was much to debate around these topics, many speakers agreed on the basic tenets of what’s necessary to achieve reliable, affordable, and clean power.
This is the fifth installment of a six-part blog series on the themes and key takeaways from EPSA’s Competitive Power Summit, which will address how competitive markets will deliver a just transition with continued consumer and economic benefits.
In case you missed it:
Continued Consumer and Economic Benefits in a Just Transition
“It’s truly frightening for consumers. Coming out of Covid right now, millions of customers can’t pay their bills and are really at risk of being shut off and likely are being shut off. There are billions of dollars in arrearages on utility books. So there is a whole social element to the things we talk about and we have to recognize that this country has a serious social equity problem around people being able to have fundamental utility service,” said David Springe, executive director, National Association of State Utility Consumer Advocates on the projected costs of decarbonization ($150 trillion figure cited by previous panel).
Expectations on business have rapidly shifted through increased ESG pressure from company shareholders to drive decarbonization, and this likely will not change for the foreseeable future. The power grid is being looked to as a key solution to decarbonize traditional power customers, as well as new sectors like transportation, which is placing increased pressure on the grid, per the panel. The impacts of decarbonization on energy prices, especially in the aftermath of the pandemic, should not be thrown to the wayside, they argued. Customers are in a tight position with energy bills piling up and prices increasing.
To ensure customer interests are a part of the decarbonization debate, stakeholders must look to diversify choices for customers, set a price on carbon and rethink decarbonization targets tied to specific years. The priority should be reliability at the lowest cost for customers. The energy subsidy framework needs to be reevaluated, with certain technologies qualifying and others not, without considering what is feasible for a customer’s energy needs. A price on carbon will level the playing field and increase competition, according to Travis Fisher, president, Electricity Consumers Resource Council (ELCON).
The panel agreed that the Federal Energy Regulatory Commission’s recent decision to make its policy statement a draft was the right move but continues to drive uncertainty in the market and for customers. By creating uncertainty within the gas industry, this will create uncertainty within the electricity sector as well because the two are intertwined.
If there is to be a just transition, affordability of energy will be essential, and recognizing the social elements of equity will inform what that means exactly. Decision-making processes will need to make room for more stakeholders to engage and be transparent and independent from private interests.
In part six of the Competitive Power Series, we will present the key findings from the “Market Design for the Future” panelists.