Power April 2022 - 40

COMMENTARY
Competition Is More
Important Than Ever to Tackle
Today's Energy Challenges
Todd Snitchler
s we commemorate another Earth Day this April, the
challenges facing our energy systems and the environment
seem more pressing than ever. Americans face
continued economic uncertainty following the COVID-19 pandemic
and rising inflation. Recent power grid disruptions have
us questioning the reliability of our electric service. Global conflict
shines a light on the critical need for a steady supply of
power generation resources. And we never lose sight of the
need to constantly innovate, and find cost-effective and sustainable
approaches to reduce the emissions that contribute to
climate change across our economy. We're at a pivotal point-
where the decisions made today by policymakers, grid operators,
regulators, and industry will determine whether competitive
power markets can continue to deliver on the progress
they've made over nearly three decades.
This year, the Electric Power Supply Association (EPSA) is
celebrating our 25th anniversary of advocating for a fully competitive
electric industry, and encouraging and expanding the
development of competitive power markets. Since our founding,
electric competition has delivered progress that even the
initial champions of opening power markets may not have envisioned-clearing
a path for cost savings, efficiencies, greater
reliability, significant decarbonization, and swift adoption of
new, cleaner power generation technologies. Competition and
restructured markets also freed captive ratepayers from the
burden of paying for new power plant investments, construction,
operations, and closures-putting the risk of investment
on private companies and shareholders.
We're optimistic that the policies we've consistently advocated
for and the solutions our member companies have provided
can provide a sustainable, durable, and cost-effective
path to electricity that is both cleaner and reliable. Today, we've
seen regions with access to competitive markets enjoy lower
carbon emissions; accelerated entry of new, cleaner, and more
cost-effective technology; and greater reliability provided by
the ability to pool power resources and the economic incentive
for power generators to perform when needed. And EPSA
member companies have brought new, cleaner, and competitively
priced technology to the grid while maintaining resources
needed to help ensure reliability-including more efficient, cutting-edge
natural gas generation and the biggest battery storage
facilities in the world.
Americans-and our nation's leaders-understand the
power of competition. In a poll conducted for EPSA by Morning
Consult, 64% of U.S. adults said they support competitive
power markets, with three-fifths saying they oppose monopoly
utility control of the electric supply chain. And President Biden
reiterated in his State of the Union speech that competition is
essential for lowering costs for homes and businesses.
But achieving that vision requires policymakers, grid opera40
A
tors,
advocates, and industry stakeholders to accept critical
truths. America's energy transition must not put reliability in
jeopardy, and Americans must not be made to shoulder unnecessary
costs in pursuit of a decarbonized grid. As in every
aspect of life and policymaking, balance is key.
Importantly, natural gas will continue to be an indispensable
source of reliable, flexible, and firm power generation for the
next several decades. This fact has been highlighted in multiple
studies, including a 2020 analysis by Energy and Environmental
Economics Inc. (E3), which shows that 50 GW to 90 GW of
firm, flexible natural gas generation will be needed to maintain
system reliability in the PJM Interconnection footprint through
2045-even under deep decarbonization scenarios. America's
competitive power suppliers simply cannot do their most important
job-providing reliable electricity-without access to
this critical resource.
Recent Pew Research Center polling revealed that Americans
on a bipartisan basis understand the need to keep all
resources on the table even as they hope for a cleaner future-with
two-thirds of survey respondents saying the U.S.
should use a mix of fossil fuels and renewables. Seventy percent
worry that a transition to renewable energy could cause
unexpected problems for the country, including higher costs,
economic strain, and reliability concerns.
Energy is too central, not just to our way of life, but also to
public health and safety, to put in jeopardy. That's why EPSA
will continue to advocate at every level-from the White
House to the Federal Energy Regulatory Commission to regional
transmission operator stakeholder processes and state
utility commissions-for policies that allow our members to
do their job. Energy industry observers are well aware of the
pitfalls that emerge when competition is compromised-from
state political scandals that put ratepayers on the hook for
billions in subsidy payments to exorbitant cost over-runs and
construction delays that ultimately harm customers. Yet, over
the past couple of years, we've seen troubling momentum for
approaches that undermine the integrity of competitive markets,
favor out-of-market subsidies funded by ratepayers, and
threaten the ability of competitive power generators to invest
in and maintain resources needed for reliability.
Our energy future is not all or nothing. It doesn't require
banning resources, bankrupting Americans, or giving up on
lowering carbon emissions. Competitive markets-and competitive
policies like carbon pricing-are a proven path toward
what I like to call the triple win: reliable, affordable, and
cleaner power. In the key policy and market design questions
on the table today-and those to come-we urge decisionmakers
to choose the competitive, reliable, and cost-effective
path forward. ■
-Todd Snitchler is president and CEO of the
Electric Power Supply Association.
www.powermag.com
POWER | April 2022
http://www.powermag.com
Power April 2022

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