The conclusion of the second day of the DNV GL Energy Executive Forum featured a lively town hall discussion with Sadzi Oliva, Commissioner with the Illinois Commerce Commission. Moderated by John Landry, Vice President, Competitive Markets with DNV GL, the discussion kicked off with how best to identify the intersection of regulation and competition in the industry.
“As a regulator, my mission is to balance the interest of a competitive energy market and consumers,” stated Oliva. “In Illinois, we don’t want to get in the way of innovation and technology. Our question is always how do we do that and also follow the law that we are authorized to implement?”
Oliva echoed the theme mentioned earlier in the day by Anthony Foxx from Lyft during his keynote address, stressing that the best way to continue fostering competition, while also protecting the consumer, is incorporating alignment, advocacy and anticipation. This also includes working with regulators and being proactive.
In terms of competition and how that differs from state to state, price-to-compare markets were of particular interest. Retailers see utility companies as offering a regulated, default service with subsidized pricing while they must pay for various overhead costs such as call centers, billing services and more while also trying to make a profit. The consensus was that price-to-compare markets are not a level playing field.
While highlighting that competition is working in Illinois and in other states, Oliva stated, “We don’t want to see competition go away. I think we get it right in Illinois because we have an office of retail development that meets with stakeholders, develops the market and makes sure things are functioning properly. which is part of our public utilities act.”
Although competition is good, bad behavior is sometimes a byproduct. Companies view competition for customers as very difficult. As a result, some companies push the envelope in terms of what they can get away in an effort to get ahead.
Nevertheless, the issue of opening up more markets was of interest to virtually everyone in the audience. “States must show how competitive markets are actually working and how prices trend downward when there is competition, stated Oliva. “The key is to have that information provided to legislatures, because they are the ones who will actually change the law to allow for deregulation.”
What happened in Arizona in 2013 and Nevada in 2018 is fresh in the minds of many, as it illustrates how deregulation might start off with widespread support, but once money and effort it poured in by utility companies and other entities, it can be defeated. There are organizations that are a voice for the industry, but successful deregulation ultimately depends on the support it gets. Groups pushing for deregulation must be committed to doing all the things that take time and money, such as talking to the commission, doing the research and more.
Deryl Brown, retail energy industry veteran and former CEO of TXU, mentioned how important it is in the utility world is to have political strength. “You’ve got to be able to get into the governor’s office, contribute to campaigns and understand these things are a huge machine,” he suggests. Brown was also adamant about focusing on the customer because the big utilities historically don’t do it well.
Additional comments were made about the Texas market, by Brown and others, illustrating how competition has worked very well. Perhaps no comment about the Texas market was as straightforward as the one from Energy Pages founder Frank Rosa: “The Texas market is fully open, and the only one in the country that really is,” explained Rosa. “Seems like the other markets opened up with price-to-compare and there have been a slew of problems and issues. Efforts to fix these problems only adds more regulations, issues and problems and the costs fall on the consumers”
To address items similar to what Rosa mentioned, Oliva believes retailers and advocates across states must connect to share ideas in order to resolve issues and advance the idea of competitive markets in other states.
“We are looking at other models, but we have to be sure of what works in Illinois,” said Oliva. “As a regulator, I often have to wait and see what the law is going to be and simply follow that.”
Discussing these issues in a town hall setting and connecting to continue the conversation once the forum concludes is a great first step.
Your Opinion Matters
Have Something To Say About This Story?