CORRUPTION SCANDALS MAKE CASE FOR ENERGY COMPETITION
As reported in Calpine Energy Solutions’ regulatory update for July, cor-ruption in the energy industry was struck a blow in two Midwestern states recently. Exelon’s Illinois subsidiary, Commonwealth Edison, ad-mitted to a federal bribery charge involving the Illinois Speaker of the House and agreed to pay a $200 million fine as restitution. Meanwhile, in Ohio, a former Speaker of the House there was indicted in a $60 mil-lion bribery scheme with utility FirstEnergy. Both cases revolved around the utilities’ self-centered desire for returns on their investments in nu-clear energy at the expense of consumers.
These cases exposed a major flaw in how utilities operate when allowed to compete in energy markets. Too often, utilities have emphasized maintaining the status quo of reliable profits over lowering costs to con-sumers. Consequently, they have often gone out of their way to keep their inefficient legacy plants operating, raising electricity costs while starving renewable-energy infrastructure of investment that could make the production of much cleaner electricity cheaper and more efficient.
Arguably, utilities should stick to serving as transmission operators and allow other market participants to provide electricity to consumers more fairly. Unlike many utilities, independent energy suppliers, such as Cal-pine Energy Solutions, can provide their customers not only lower fixed prices and total costs but also sustainable renewable-energy products in a fair and transparent manner.
Of course, true competition occurs more organically and most efficiently in deregulated markets reorganized through RTOs and ISOs. However, although RTOs and ISOs have become more common, much of the United States, as shown in the accompanying map from the Federal Energy Regulatory Commission, still has not deregulated, but perhaps that will not be the case for long. As more ISOs continue to expand ac-cess to more markets, more consumers will be able to make their own choices to the benefit of their bottom lines and the environment.