Rocky Mountain Power’s proposed rate increases have raised the ire of solar companies in this state. Estimates suggest these rate increases will boost the bills for homeowners with rooftop solar equipment by about $19 per month.
To Rocky Mountain Power’s credit, there is plenty of room to debate what actually is the right type of ratepayer agreement for homeowners who have invested in solar. There is something to be said about all customers, including those with rooftop solar, paying their fair share. Without these changes to the rate structure, poorer consumers who can’t afford solar often end up subsidizing those who can.
But even if you don’t buy into the renewable energy “revolution,” ask yourself: Why can’t I choose my electricity provider the same way I choose a cellphone carrier or TV provider?
The reality is Rocky Mountain Power has a state-protected monopoly on electric power covering nearly all of Utah. This one-size-fits-all electric scheme owned and operated by the utility doesn’t value the diverse interests and values of people throughout the state.
A regulated monopoly is not the only option. Other states have pioneered ways to allow more consumers to get more of what they want from the electric power industry.
States across the nation have successfully restructured their electricity markets to allow consumers to shop for and purchase electricity based on what consumers value, rather than what utility executives or politicians want. Under a restructured market, a consumer in Park City who wanted to reduce their carbon footprint could elect to purchase their power from 100 percent renewable sources. Likewise, a consumer who wants to save money can shop for deals that don’t charge them for using power at night or on the weekend. A consumer with rooftop solar might select a net-metering contract tailored to their own situation.
Consumers in Texas, one of the states that has successfully moved away from the regulated monopoly model, can choose from more than 300 electricity plans available from over 50 competing retail energy suppliers. It’s a lot like shopping for a cellphone plan — you can buy a plan based on what is important to you. Other states, such as Pennsylvania, Maryland and Illinois, have all undertaken major reforms of their electricity markets.
Utah’s neighbor Nevada recently passed an Energy Choice Initiative to get rid of NV Energy’s monopoly on electricity in the state. The ballot measure that passed last year could become an amendment to Nevada’s Constitution, wherein the state legislature would be required “to provide by law for the establishment of an open, competitive retail electric energy market that prohibits the granting of monopolies and exclusive franchises for the generation of electricity.” The initiative was hailed as a win both for renewables and consumer choice, as the utility will no longer be allowed to charge rooftop solar customers disproportionately for using the grid. The prospective utility changes are helping Nevada draw in investment from high-tech companies.
According to the Bureau of Labor Statistics, Utah is adding technology jobs at a faster rate than any other state in the nation. Utah draws in technology companies because of its low taxes and reliable talent pipeline from local universities. Allowing consumer choice in electricity could allow tech companies to innovate further and help make Utah an even more attractive destination.
Utah is a geographically diverse state with diverse consumer interests. When it comes to electricity generation, people in Park City value very different things than people in Price. The way to give consumers the ability to choose where they get their electricity isn’t by allowing political elites in Salt Lake City to manipulate consumers’ pocketbooks. Instead, Utah should give all people the freedom to choose what is best for them. If a consumer in Park City, or a consumer in Price, wants to get their power solely from solar-generated sources, they should have that choice.
If Utah policymakers want to live up to the state’s reputation as one that values entrepreneurial effort and personal responsibility — a state that places individual preferences over the preferences of government — they should consider restructuring Utah’s electricity market to allow for competition and greater individual consumer choice.
Utah has an opportunity to modernize its electric grid by giving its citizens the freedom to choose where their power comes from. Restructuring the retail electricity market to allow for individual choice is something all Utahns should get behind.
Michael Giberson, Ph.D., is a professor in the area of Energy, Economics and Law at the Rawls College of Business at Texas Tech University. His research focuses on energy policy and electricity markets. Ethan Dursteler is a research associate at Strata, a public policy and energy research organization in Logan.