October 1, 2003—Electric utility restructuring in the Mid-Atlantic saved consumers $3 billion in 2002, a study by the Center for the Advancement of Energy Markets (CAEM) concluded.
Future savings in the region are expected to total $28.5 billion, the study said. It estimates that all consumer classes have benefited from restructuring, particularly wholesale customers. The study, the first of its kind, was authored by Dr. Ron Sutherland with the assistance of a working group representing over 20 organizations and energy economists.
“This study proves that competition clearly benefits consumers—all consumers, large and small—in the Mid-Atlantic region,” stated CAEM President Jamie Wimberly. He said that PJM, the independent system operator serving the Mid-Atlantic, “provides a model for the country to follow and refutes some arguments now heard in Washington against competition in electricity markets. This study shows instead that regional approaches like PJM are in the best interest of consumers.”
Highlights of the study include:
- Restructuring produced over $3 billion in total savings in 2002 in the Mid-Atlantic (PJM) region, with New Jersey saving $1.46 billion; Pennsylvania, $993 million; Maryland, $662 million; Delaware, $97 million; and the District of Columbia, $74 million.
- Approximately $28.5 billion in future savings is expected, broken down as follows: New Jersey, $6.4 billion; Pennsylvania, $10.4 billion; Maryland, $3.8 billion; Delaware, $665 million; and Washington, D.C., $504 million.
- Under PJM’s auction system, reliability has improved in the PJM region. Since 1997, the availability factor of generating capacity has increased continuously.
The Center for the Advancement of Energy, is a nonprofit, independent, Washington, D.C.-based, think tank founded in 1999 to promote market-oriented solutions to the challenges that confront the energy industry, other network industries, and the nation.
