Electric Power Generation Assn. Encourages Growth of Wholesale, Retail Electricity Markets

Electric Power Generation Association president, Doug Biden, this week testified at a hearing of the Public Utility Commission to outline the benefits of competitive wholesale markets.

 

"Over the past 9 years EPGA companies have invested over $12 billion in capital improvements at existing generating plants in Pennsylvania (for example, to increase output and to decrease environmental impacts). So these are not the same plants they were at the time of electric restructuring," said Biden.

 

"Generators have also invested tens of billions more in wages, fuel, and taxes at these plants, which employ thousands of Pennsylvanians. EPGA companies are also planning more than $14 billion in capital expenditures at existing plants for the years 2008-2013."

 

Biden continued, "Wholesale electricity prices have increased in recent years because the cost of fuels used to generate electricity, such as coal and natural gas, have risen dramatically. However, these higher fuel costs have been offset in part by the increased efficiency of the generation industry under competition, as shown by the fact that wholesale prices are actually 23 percent lower than ten years ago when adjusted to remove the higher fuel costs."

 

Biden went on to testify that in order to continue to attract the innovation and investment necessary to meet Pennsylvania's energy security and environmental challenges, investors must be assured that the basic rules of the electricity market will not be dramatically changed by legislation or regulation.

 

"Investors will not risk billions on new plants, or major modifications to existing plants needed to address climate change, or to maintain reliability if they do not know whether they will have a reasonable chance of cost-recovery and a fully-functioning market. Yet that is the situation we face today," said Biden.

 

Biden ended his testimony by reinforcing EPGA's position that a competitive market is the best model for both the electric industry and its consumers. He reinforced that Commonwealth's efforts must be focused on improving wholesale markets, not dismantling them.

 

For more information, visit the Electric Power Generation Association and the PA Energy News websites.