A Tulsa-based nonprofit said this week it plans to advocate for legislative reforms that would restructure the state’s electricity market to enable 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 electricity for commercial and industrial consumers.
Currently, all residential and commercial consumers in large areas of the state are required to purchase electricity from one of three government-designated suppliers, AERO said. In the Oklahoma City metropolitan area, OG&E is the provider. In Tulsa, PSO fulfills this role. Liberty serves approximately 4,500 customers in eastern Oklahoma.
“Our monopoly suppliers have an inherent conflict of interest,” AERO Chief Executive Mike Boyd said in a statement. “They cannot serve the interests of their investors by seeking to maximize their profits while serving the interests of Oklahoma taxpayers, who need affordable and reliable energy. We can fix this system by injecting choice and competition into the market and allowing ratepayers to choose who they buy their electricity from.
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AERO is currently focused on reforms that would allow companies to choose an electricity supplier, in the same way 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 areas, maintaining power lines and responding to outages.
Companies would, however, have the option of paying a different supplier for their electricity consumption.
A competitive market, AERO said, would allow businesses to pursue several options not currently available to them, including flat-rate plans that would be insensitive to the type of weather-related price shocks seen in 2021. Businesses could also buy “green” electricity plans powered by wind and solar energy.
Electricity prices are down 7% in the 14 states that have embraced choice and competition since 2008, according to research by the Retail Energy Supply Association (RESA). During the same period, prices increased by an average of 21% in monopolistic states.
“When a provider has no competition for its services and consumers have no choice, prices go up, innovation is stifled, and market inefficiencies are everywhere,” Boyd said. “Injecting choice and competition into Oklahoma’s electricity market will reduce costs and benefit Oklahoma businesses and ratepayers, rather than a small group of shareholders.”