Putting Competitive Power Markets to the Test, a new study by independent consulting firm Global Energy Decisions finds competitive electricity markets in the eastern US and Canada have saved consumers about $15 billion in power costs between 1999 and 2003.
The study, commissioned by an alliance of independent power companies such as Reliant and Williams, finds that rather than building new generation facilities, utilities were able to purchase energy from power companies at a fraction of the cost.
According to the study, while the costs of building and operating power plants would have left consumers with about $29 billion in operating expenses between 1999 and 2003, buying power from independents cost consumers around $14 billion. “Thus,” says the study, “the consumer benefit is $15.1 billion when all the costs, including the cost to buy merchant power, were considered over the more traditional process of allowing utilities to build the assets.”
The study also looked at the considerable financial benefits associated with utilities transferring grid operations to independent companies.