November 08, 2024
Business

Report gives mixed marks on New England power

BOSTON – New England’s wholesale electricity market is more competitive than others in the United States, but prices still are higher than they would be in a perfectly competitive market, according to a new report.

The study was an attempt to determine why deregulation of the region’s electricity industry so far has failed to produce a truly competitive wholesale electricity market.

The report, released Thursday, did not explain why the region’s market is less than competitive, but suggested it may be transmission constraints that force utilities to pay more for power.

The review was commissioned last year by the Maine Public Utilities Commission, Massachusetts Attorney General Tom Reilly and ISO New England, which operates the region’s electricity grid.

“It indicates that while there remains room for improvement, the New England electric energy market functions reasonably well, all things considered,” said Thomas Welch, chairman of the Maine utilities commission.

Gordon van Welie, ISO New England’s president and chief executive, said, “This study demonstrates that New England’s wholesale markets are relatively competitive.”

But Reilly, whose office represents ratepayers, said the study shows the need to examine further why perfect competition doesn’t yet exist.

The study was conducted by James Bushnell, who conducted a similar study of the California wholesale market, and Celeste Saravia.

Both are researchers at the University of California Energy Institute.

It compared the costs of producing electricity with the price charged in the wholesale market. New England’s market had the smallest difference between those two prices when compared to California and the mid-Atlantic region.


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