The electricity customers who have signed this letter encourage you not to make any changes to the competitive electricity market framework in Maryland.
Each month, more and more Marylanders are choosing the benefits a competitive supplier can offer. Competitive electricity markets are providing documented benefits to consumers. They keep prices as low as possible, drive innovation, and produce other benefits for consumers, while ensuring a reliable supply of electricity.
Vibrant electricity markets are important to Maryland’s economic and job growth. A stable framework within which competitive suppliers can operate will increase competition and benefit consumers.
In Maryland, we collectively represent 906 facilities, with over 58,000 employees and nearly $102 million in annual electricity costs as consumers of electricity.
Electricity is one of our largest operating costs, and control of these costs enhances growth and profitability. Competitive electricity markets lower costs but they also give us the flexibility to choose a supplier that best meets our individual business goals.
Perhaps most important, in competitive markets investors not consumers bear the risk of bad business decisions. Proven cost savings from electricity markets mean lower costs for consumers.
And rates for commercial customers in organized market states actually decreased by 2 percent in real terms while rates in the other states increased by 3 percent. Wholesale prices in the organized competitive markets recently decreased sharply.
One source of billions of dollars of cost savings for consumers is the operational efficiencies of the organized markets. The PJM market, which operates in Maryland, estimates that its operations save the region $2.2 billion each year.
Markets also attract the lion’s share of renewable resources and other innovative technologies. This is because of the markets’ fair rules, ease of entry, large regional scope and transparent locational prices that correctly value energy. Nearly 80 percent of installed wind capacity is now in regions with organized competitive electricity markets, despite the fact that these areas represent only 44 percent of U.S. wind energy potential.
Other innovators, such as cutting-edge storage resources using state-of-the-art battery or flywheel technologies, are choosing to install their advanced equipment in the RTO and ISO markets, increasing efficiency and reliability, and lowering costs.
Finally, the proof that competitive electricity markets benefit customers is demonstrated by the number of customers with choice who actually shop for alternative suppliers. In 17 states that allow retail competition, competitive providers supply nearly 45 percent of eligible electricity demand, up from 20 percent in 2003.
Fifty-seven percent of all eligible non-residential demand is supplied by a competitive provider. In 10 states, more than 68 percent of large commercial and industrial customers have switched to alternative suppliers, and in nine states more than half of medium commercial and industrial customers have switched suppliers.
In Maryland, the number of commercial and industrial customers that have switched to competitive suppliers increased by 15 percent in 2010, with over 54 percent of medium commercial and industrial customers, and almost 90 percent of large commercial and industrial customers, served by competitive suppliers.
In 2010, the number of residential customers in Maryland whose electricity is provided by a competitive supplier almost tripled, increasing from 5 percent at the end of 2009 to 13.5 percent at the end of 2010.
In summary, competitive electricity markets have a track record of bringing substantial benefits to consumers and to their states and regions.
By keeping costs down, driving innovation, and empowering customers to make customized procurement decisions for one of their largest and most volatile operating costs, competitive electricity markets spur job creation and improve Maryland’s competitiveness in the national and world economies.
For all these reasons, vibrant electricity markets are vitally important to the businesses that are signatories to this letter.
7-Eleven Inc.; Best Buy; BJ’s Wholesale Club Inc.; Boston Market Corporation; Leggett & Platt Inc.; Macy’s Inc.; PetSmart Inc.; Rite Aid Corporation; Safeway Inc.; Sears Holdings; SuperValu Inc.; and Wal-Mart Stores Inc.