"Competition is Good!"
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Basic Principles of Energy Freedom
Replacing monopoly utility territories with competing electricity providers that offer consumer choice lets the market choose winners and losers, and is the best way to get more and cheaper renewable energy. [Download PDF]
Retail Choice & RTO States
Background on Electricity Choice and Competition:
- Colorado is a "vertically-integrated monopoly state."
We have no choice of electricity provider.
- Electricity generation is not a "natural monopoly."
There are many suppliers and energy sources.
- We are investigating both wholesale competition
and retail consumer choice.
- More than 30 states have competitive wholesale
electricity markets, and they work.
- Generators bid electricity into the market.
Market chooses winners and losers.
- Lowest bids win. In many states with wholesale markets, coal is no longer competitive.
- Renewables (wind and solar) are getting cheaper every day. Texas is leading the nation on wind.
- At least 20 states have retail choice of some type. Two examples:
- Texas: Full-blown individual retail choice (consumer chooses from competing electricity providers).
- Illinois: Community-level choice of electricity provider, with opt-out provision.
- Most states belong to a "Regional Transmission Organization" (RTO): We need one in the West.
- RTOs pool high-voltage transmission assets of many utilities for greater efficiency and lower cost.
- RTOs are independent non-profits that run competitive wholesale markets.
- Many RTO states have some type of retail consumer choice too.
- Energy monopolies are outdated. Poles and wires are still natural monopolies, but not generation.
- Monopolies are incompatible with retail-level competition. They need to compete too.
- Doesn't apply to co-ops and municipal utilities, who have some control over their energy destiny.
- Nevada eliminated energy monopolies and required competitive electricity markets at the 2016 ballot box.
- Measure passed by an astounding 72%! A testament to bi-partisan appeal.
- Many states have "deregulated" electricity. Many states have eliminated monopoly territories.
- This is not radical – having a choice of electricity provider is just unfamiliar to Coloradans.
- Colorado is in an excellent position to create competitive markets from the ground up.