The Energy Choice Coalition recently joined more than 30 organizations representing commercial, industrial, and residential consumers and public interest groups in calling on the U.S. Department of Energy (DOE) and Congress to support state efforts to launch and expand organized wholesale electricity markets.
The coalition sent a letter on November 19 to Energy Secretary Jennifer Granholm asking the Energy Department to support state efforts to develop new competitive wholesale electricity markets and improve existing ones.
As more states consider creating regional organized wholesale markets to integrate more dispatchable energy resources (DERs) like wind and solar and increase the flexibility of the overall electricity system, DOE should make every effort to ensure that state energy and regulatory officials and consumers have the necessary tools and technical assistance to needed to adopt a more competitive wholesale market structure.
By leveraging the power of competition and balancing clean energy generation over large geographic regions, organized wholesale markets can expand purchasing options and support reliable clean energy integration, increasing the ability of large energy customers to drive the clean energy transition.
While organized wholesale markets serve roughly 200 million consumers across the country, states in the West and Southeast lack such markets. Consumers in those regions still operate under the traditional vertically integrated utility model, where a single utility has a monopoly on generation, transmission, and distribution services. But interest in expanding the competitive market model at the wholesale level is growing as a way to support DER integration and take advantage of demand-side grid management opportunities.
“Well-designed, organized wholesale markets that ensure fair market access for third-party generation sources and ancillary service providers are a crucial part of a successful energy transition to cleaner energy sources that consumers of all sizes want,” said Robert Dillon of the Energy Choice Coalition.
In the letter, the groups point out that the passage by Congress of the Infrastructure Investment and Jobs Act of 2021 and this year’s Inflation Reduction Act made unprecedented amounts of federal investment available to support states seeking to establish or expand wholesale energy markets in their regions.
States in the West and Southeast have a unique opportunity to maximize federal investment in energy infrastructure by working with utilities and other stakeholders to develop and improve organized wholesale electricity markets, specifically markets that enable cost-effective, clean energy deployment while maintaining reliability. DOE should prioritize state efforts consider a range of potential electricity market reforms as it disburses the federal funding approved by Congress in the Infrastructure Investment and Jobs Act and the Inflation Reduction Act.
“The DOE should explore every opportunity to join states to develop and improve wholesale electricity markets as they reduce electricity costs for energy consumers,” the groups state in the letter.
Read and download the full letter here.
