Whither Retail Competition?: A Residential and Low-Income View

Slides presented by Jerrold Oppenheim at a conference sponsored by the New Mexico State University Center for Public Utilities.

The objective of electric utility policy should include reliable service and affordable, stable prices for residential customers. Retail (and even wholesale) competition has not accomplished this objective anyplace in the world. Instead, it has brought higher and more volatile rates, along with catastrophic failures in customer service, redlining, and sharp increases in low-income arrearages. In addition, the merchant generation business model has failed, which threatens reliability. Future policy directions for residential electric service should include portfolio management that requires least-cost resource choices consistent with a portfolio mix that achieves rate stability. There also needs to be a mechanism that assures there will be a builder of last resort to assure supply at a reasonable price.