Will Question 3/energy choice lower rates?

By Jon Wellinghoff, Former Chair of Federal Energy Regulatory Commission

Short answer—yes, energy choice lowers rates in states that implement it. Choice leads to competition among providers bidding for consumer attention, which in turn cuts prices and increases savings.

The 14 states that have implemented energy choice have seen their rates fall against inflation over the past decade, and if Nevada follows suit this November, the average family is projected to save as much as $11.16 a month or more on their power bills.

Rate savings

Consumers in states with energy choice have seen their rates fall over time, according to research done by the Retail Energy Supply Association (RESA). Using data from the U.S. Energy Information Administration, the RESA shows a decrease of 14 percent in electric rates in states with choice markets from 2008-2016 when adjusted for inflation. Meanwhile, monopoly states saw their rates rise above inflation during that same time.

Additional findings from across the country corroborate these high rate savings. For example, in Ohio, researchers found that implementing energy choice saved consumers $3 billion a year. In Pennsylvania, consumers have saved $1 billion so far as their rates have decreased more than 15 percent. According to the Federal Reserve Bank of New York, a typical family of four will save about $250 a year because of competition in the energy market.

Production savings

Energy choice doesn’t just lead to lower rates—it also leads to savings in energy production. According to a study from the National Bureau of Economic Research, energy choice has reduced energy production costs by $3 billion a year. When production savings such as these are added to rate savings by consumers, the financial benefits of switching to a competitive market become even clearer.

Savings for Nevada

In addition to evidence from other states that energy choice saves ratepayers money, there is also Nevada-specific research to indicate that Nevadan households will see as much as $11.16 or more in monthly savings on their power bill under energy choice, or $133.92 a year. A 2018 study conducted by the Garrett Group illustrates these consumer savings, which end up totaling “about 10%” of Nevadans’ power bills every month.

Research across the country and here in Nevada indicates energy choice lowers rates and increases consumer savings.

About Jon Wellinghoff

A graduate of the University of Reno, Mr. Wellinghoff served as Nevada’s first Consumer Advocate and Chairman of the Federal Energy Regulatory Commission (FERC). He was appointed to FERC by President Bush and appointed as Chairman by President Obama. He is a leading national expert in energy policy and the author of an enhancement to Nevada’s original Renewable Portfolio Standard. Mr. Wellinghoff has also served as legal counsela to U.S. Senate Commerce Committee, the Federal Trade Commission, and the Nevada Public Utility Commission.