Pennsylvania faces the very real threat of being dethroned as the nation’s leading model for electricity choice because skyrocketing wholesale power prices are pushing state customers to abandon electric choice in favor of default providers, according to the Center for the Advancement of Energy Markets. As Pennsylvania stumbles on the road to electric deregulation, Texas, Maine and New York are all making impressive strides in promoting sustainable competition among electricity providers, the center said.

The center yesterday unveiled its latest retail energy deregulation (RED) index for all 50 states and the District of Columbia. The index ranks states by 22 attributes for how they are restructuring their power markets. A RED index score of 100 represents complete and effective implementation of policies that make up the foundation needed for effective customer choice.

According to the latest rankings, Pennsylvania comes in first with a score of 66. But there’s not a lot of breathing space between the state’s top position and Texas, New York and Maine, which had scores of 65, 64 and 62, respectively. To put those rankings in context, California ranks 17th on the index with a score of only 34. If rankings included all of North America, the province of Alberta actually would rank above all the states with a score of 68.

Participation in Pennsylvania’s customer electric choice program, as measured by the amount of electricity competitively sourced, declined by an eye-popping 66% from Jan.1 through July 1 of this year, according to the state’s Office of the Consumer Advocate. The center noted that industry and Pennsylvania state officials say new power plants due to begin generating electricity soon should increase supply and help drive down prices.

“Texas clearly now is the state to watch,” said Ken Malloy, the center’s CEO. “And we should keep an eye on Maine because as a percentage of power consumed, more users — about 35% — are switching electricity providers there than any other state.” Texas allows all consumers to choose their electricity provider starting Jan. 1, 2002. However, a deregulation pilot in the state continues to struggle to get off the ground (see Daily GPI, July 6).

The center said that New York earned its number three position in the mid-year RED index in part by requiring utilities to divest generation facilities and modifying its business rules to conform to industry-supported national standards.

The index also found that 62% of states expressing an opinion indicated that their state commission is not “less likely to take action on energy restructuring as a result of the California crisis.”

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