More States Questioning Broken Electricity “Markets”

It may be weeks until spring in much of the U.S., but ideas for fixing broken electricity markets are beginning to bud across the country.  And while you wouldn’t know it if you only read current events through a Washington, D.C. lens, it has long been true that the frontlines of energy policy are in the states.  With legislatures now in full swing throughout the country, it’s a good time to highlight some of the more interesting matters taking shape in the states.

New England is a region particularly worth watching.  It has typically had some of the nation’s highest priced energy, and this winter the costs have been worse than most.  In turn, it is spurring significant debates in the states about how to help consumers.

In Connecticut, legislators are asking tough questions about large rate hikes that recently went into effect.  They are learning that it is not the state regulated utilities that are the reason for the increases.  It is wholesale costs, driven by spiking natural gas prices, out-of-state generators, and broken markets, as explained in this report from Connecticut Public Radio.

Just up the road in Massachusetts, newly elected Governor Maura Healey has long been a supporter of reforming the state’s unfortunate experiment with electricity restructuring.  In her former job as the Commonwealth’s Attorney General, she conducted extensive oversight of the state’s energy sector and supported ending retail deregulation for residential customers.  By her estimates, residential customers lost over $400 million dollars through so-called “competitive” energy supply contracts.  As the state’s new top elected official, she’ll be in a position to enact the changes she has long championed.

And over in New Hampshire, legislators have begun asking questions about whether the state would be better off untethering from ISO-New England, the region’s Regional Transmission Organization.  HB 443 calls for a study of leaving the RTO and follows similar inquires in past years in Maine and Connecticut.  The legislation had its first hearing at the end of January and remains pending.

Moving out of New England, and as noted by this blog several days ago, Nevada’s new Governor called for a fundamental re-evaluation of the danger of the state being drawn too tightly into dysfunctional electricity “markets.” Gov. Joe Lombardo’s State of the State was an important reminder that reliability and affordability are among the most important issues for his state – or for any state.

These are but a few examples of state leaders asking questions about how to structure utility regulation for the benefit of customers.  What may be most noteworthy is the bi-partisan nature of the calls for reform.  It all points to the fact that energy policy is not a red or blue issue.  Reliability and affordability are issues that leaders of all political stripes are able to embrace.  If you want to see that in practice, it pays to keep three words in mind: watch the states.