Power sellers want to expand; utilities stand in way

Texas and 15 other states give consumers the ability to choose heir own retail electricity providers, and the retail electric industry would like to see that number expand.

But that’s not likely to happen anytime soon as electric utilities fight against giving up their monopolies and federal regulators show little inclination to push states to deregulate their electricity markets.

Power retailers should expect a struggle to open new markets in the United States over the next five years, said Matt White, general counsel for the Ohio retail electricity provider IGS and president of the trade group Retail Energy Supply Association. The industry, he said, needs to show how choice and competition is working to benefit consumers to compete with the big budgets utilities have to mount public relations campaigns and lobby legislators and regulators.

To win, retail electricity providers need to show the industry is bringing value to customers with offering green electricity options and technology to monitor electricity use.

“We’re facing a lot of upcoming battles because of public relations and messaging,” said White, speaking this week at the Energy Marketing Conference in Houston.

States began deregulating power markets about 20 years ago, essentially breaking up local monopolies held by utilities, which once controlled generation, distribution and sales of electricity. Most laws required power generation and distribution to be placed in different hands. In Texas, for example, utilities such as Center-Point transmit and distribute power, while merchant power companies such as NRG Energy and Calpine generate it and dozens of retail power companies sell it, competing fiercely for customers.

Losing battle

The last big fight for retail electric providers to expand their reach came last year in Nevada, when electricity sellers and utilities went head to head over a ballot measure to deregulate the power market. Nevada requires constitutional changes to be approved by voters twice in separate elections.

The first vote in 2016 overwhelmingly sided with retail providers to open electricity markets to competition. But the measure failed by nearly the same margin last year as opponents, including a regulated utility in Nevada, pumped millions of dollars into an anti-deregulation campaign that argued it could disrupt clean energy investments, cause electricity rates to increase and introduce unnecessary complexity into power buying.

Same old argument

“It’s the same old utility argument,” said Chris Hendrix, director of markets and compliance at Walmart, which provides power to its stores through its own retail electric provider, Texas Retail Energy. “The fear of uncertainty.” lynn.sixel@chron.com twitter.com/lmsixel