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Tulsa World: Nonprofit seeks law change to restructure states' electricity market

Jul 23, 2022

A Tulsa-based nonprofit said this week it plans to advocate for legislative reforms that would restructure the state’s electricity market to allow for choice and competition.

The Alliance for Electrical Restructuring in Oklahoma (AERO) said it wants to end the monopoly status of Oklahoma Gas & Electric Company (OG&E), Public Service Co. of Oklahoma (PSO) and Liberty Utilities as brokers of electricity for commercial and industrial consumers.

Currently, all residential and business consumers in large areas of the state are required to purchase electricity from one of three government-anointed vendors, AERO said. In the Oklahoma City metropolitan area, OG&E is the provider. In Tulsa, PSO serves that role. Liberty services roughly 4,500 customers in eastern Oklahoma.

“Our monopoly vendors have an inherent conflict of interest,” AERO Executive Director Mike Boyd said in a statement. “They cannot serve the interests of their investors by seeking to maximize profits while also serving the interests of Oklahoma’s ratepayers, who need affordable and reliable power. We can fix this system by injecting choice and competition into the market and allowing ratepayers to choose who they purchase their power from.”

AERO’s current focus is on reforms that would allow businesses to choose an electricity vendor, similar to how the natural gas market is already structured, Boyd said. He added that OG&E, PSO and Liberty would continue to act as the only utilities in their regions, maintaining electricity lines and responding to outages.

Businesses, however, would have the option of paying a different vendor for their electricity consumption.

A competitive market, AERO said, would allow businesses to pursue several options unavailable to them now, including fixed rate plans that would be impervious to the kind of weather-related price shocks seen in 2021. Businesses could also purchase “green” electricity plans powered by wind and solar energy.

Electricity prices have decreased by 7% in the 14 states that have adopted choice and competition since 2008, according to a study by the Retail Energy Supply Association (RESA). Over that same span, prices increased by an average of 21% in monopoly states.

“When a provider has no competition for its services and consumers have no choices, prices go up, innovation is stifled and market inefficiencies are everywhere,” Boyd said. “Injecting choice and competition into Oklahoma’s electricity market will lower costs and benefit Oklahoma’s business community and ratepayers, rather than a small group of shareholders.”

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