Three Policy Trends That are Good News for Energy Marketers

By Frank Caliva

It’s no secret that retail energy suppliers are facing challenges across many markets, and these roadblocks often get the most attention. At the same time, however, there are other developments that should give energy marketers renewed confidence in future opportunities.

Market Expansions

Believe it or not, we are in a new round of major market expansions, though it may look different than it has in the past.

For example, on May 30, the California PUC approved a substantial increase in the statewide cap on non-residential customer shopping, adding 4,000 GWh of new demand. The CPUC is also investigating making all remaining non-residential customers eligible for choice. Another area of growth is Community Choice Aggregation, with over four million customer accounts participating today, and other cities like San Diego moving quickly to implement their own CCAs.

In Arizona, the state Corporation Commission has opened a proceeding to evaluate retail electricity competition. The Energy Freedom Act signed into law this spring in South Carolina allows commercial customers with at least 1MW of demand to select a competitive provider of renewable energy. In Florida, an energy choice coalition is sponsoring a ballot initiative to allow retail electricity competition. Despite opposition from the utilities, there is strong public interest based on polling data and collected signatures.

What’s our forecast on market expansion? We see growth of current programs or new pilot programs for non-residential customers as almost certain. For residential customers, the focus will be on municipal aggregations and renewable energy products.

Grid Modernization & Data Access

The second trend we see is the push for grid modernization and the roll-out of smart meters. Since New York launched “Reforming the Energy Vision” in 2014, other states have followed suit, including Illinois, Connecticut, and DC. The potential for retail energy suppliers is in access to real-time meter data. With data access, it will become possible to offer more value-added products, like time-of-use rates or demand response services.

In the District of Columbia, the final report of the MEDSIS initiative in late spring called for the DCPSC to work with utility Pepco to enhance customer data access and protection. On June 10, New Jersey’s draft 2019 energy master plan recommended the Board of Public Utilities ensure customers have easy, free access to their data, as well as the ability to share data with third parties.  Stakeholder processes in Illinois and New York  are focused implementing Green Button Connect for gas and electric utilities to allow customer and authorized third-party data access.

Looking to the future, we see smart meter roll-out completed in competitive markets in the next 5-10 years, with near real-time data access available. At the same time, utilities will increasingly offer time-of-use products themselves, meaning suppliers will need to out-innovate and out-compete.

Supplier Control of the Bill

Finally, supplier control over the customer bill is on the upswing.  In Maryland, Supplier Consolidated Billing (SCB) was recently approved by the PSC. At the end of May, Delaware opened a rulemaking to consider SCB as well, and utility AEP Ohio just received approval to launch an SCB pilot program in the Buckeye State. Other utilities are cautiously opening up their own consolidated bills to non-commodity charges – for example, utility Dayton Power & Light in Ohio recently proposed allowing retail electricity suppliers to place non-commodity charges on the utility consolidated bill.

With better data and bill access, regulators’ expectations will only heighten that suppliers will move away from commodity-only, variable rate products. The suppliers that can leverage the data and bill to offer energy-focused, value-added products, however, will survive and thrive.

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Frank Caliva is the President of P.R. Quinlan