State energy-choice models show it can work in Nevada

By Monica Brett

Monday, Aug. 15, 2016 | 2 a.m.

Deregulation has opened up the energy market to licensed independent electric supply companies, thereby lowering electricity rates for smart consumers in Connecticut, New York, New Jersey, Massachusetts, Illinois, Ohio, Pennsylvania and several other states. Previously, utility companies owned both the power plants to generate electricity plus the transmission towers, lines and poles to distribute the power to consumers. With deregulation, utility companies cut their power-generation plants but held on to all their transmission lines and other distribution assets so they could continue to deliver electricity and service all customers as before.

Deregulation allows you to select a company for the supply portion of your electric bill. Your electric-supply cost will decrease with lower electricity rates, and your service will not be affected in any way. You may choose an electricity supplier that offers a greater percentage of green energy. As an example, Verde Energy USA is committed to supporting the use of renewable energy sources in each state it services. Community Energy sources its wind power entirely from new wind farms within the region that its customers reside. Illinois customers receive 100 percent Illinois wind and solar power. Thanks to deregulation, not only can smart consumers save money on their electric bills, but they may choose an electric supplier that uses renewable resources.

In the meantime, some electric suppliers offer to fix your monthly electric rate at historically low rates in specific states. Regardless, the original utility company will continue to fully service your account and send you one monthly bill.

A primary benefit of deregulation is that it allows the right to electric choice. On your utility bill you would see two charges: a supplier charge for electrical generation, which accounts for approximately 60 percent of your monthly bill, and a delivery charge for delivering the electricity and providing service along the power grid, which accounts for approximately 40 percent. In Connecticut, Illinois, Massachusetts, New Jersey, New York, Ohio and Pennsylvania, you have the right to choose a licensed, independent electric supplier for the supply portion of your bill. When you specify your electric choice in those states, your local utility company must provide that lower-cost electricity over its system of power lines and transfer stations while passing along the savings to you. Your local utility company will continue to fully service your account and send you one monthly electric bill. The only change is that your bill will be less.

Under New Jersey’s energy-deregulation law, the supply portion of your electric or natural gas bill is separate from the delivery portion. With the supply portion open to competition, customers can shop around for the best price on their energy supplies. Their electric and natural gas distribution utilities will still deliver those supplies through their wires and pipes — and respond to emergencies, should they arise — regardless of where those supplies are purchased. Purchasing your energy supplies from a company other than your electric or gas utility is purely an economic decision; it has no impact on the reliability or safety of your service.

The New York State Public Service Commission approved utility plans that give electric customers access to new energy suppliers. The plans require the utilities to offer retail choice to customers who want to shop for electricity and related services. The delivery of electricity to homes and businesses, however, will remain the job of the local utility and continue to be regulated by the Public Service Commission.

Having worked with NV Energy while at the Southwest Energy Efficiency Project, I would expect that the company would argue there is no need for competition it provides all the services we need in this state. My response would come right from Forbes. Competition is good for all businesses. It forces you to focus on your core audience, it shakes off complacency, it leads to innovation and it provides valuable insight into the state of the market. I haven’t met a NV Energy customer who wouldn’t want that.

New Yorkers have had the opportunity to shop for their electricity provider since the late 1990s. In a competitive market, it’s pretty likely that electricity prices would be lower, and you would have the opportunity to choose cleaner energy sources. You as a consumer, and the state as a whole, would benefit. So, it seems clear that it’s time for energy choice in Nevada.

Monica Brett, who lives in Las Vegas, is a U.S. Department of Energy education partner and a founding member of the Nevada Distributed Generation Alliance.