Retail 2.0: Can DER’s Revive Retail Choice?
- Mar 23, 2020 9:38 pm GMT
This item is part of the Innovations in Power - Spring 2020 SPECIAL ISSUE, click here for more
Retail Choice has had a mixed record over the last 30 years…but DER penetration will increasingly influence Regulated and Retail Utility economics. Is it time for Retail to rise again?
The restructuring of the American power industry in the late 20th century was driven by an expectation that increased competition would benefit utility customers. However, while wholesale restructuring has transformed the generation landscape, customer benefits at the retail level have been more ambiguous.
In Texas, the bastion of American deregulation, Retail Electric Provider (REP, or “Retail”) rates have only recently begun to converge with rates at regulated utilities. Referencing rate data from the Texas Coalition for Affordable Power and historic Henry Hub prices from the EIA, one can make the argument that Retail has lead to a closer alignment between rates and supply costs…but these potential savings have been accompanied by unsavory practices in customer acquisition, and by customer retention strategies that are reminiscent of cable television.
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