In a new report presented to the Electricity Market Reform Measures Study Committee of the South Carolina General Assembly today, Brattle consultants find annual savings over $300 million from participation in a regional wholesale market. The finding is part of an examination of the nature and size of potential benefits that could be achieved through market reforms in South Carolina’s electricity sector.
The Brattle report assesses three potential areas of reform:
- Wholesale market reforms that could improve the cost-effectiveness of generation resource operations and trade across regions;
- Resource planning and competitive investment reforms that seek to improve the cost-effectiveness of resource investment decisions, some of which can also shift investment risks from customers to generator owners; and
- Retail market reforms that would offer customers greater opportunities to select their preferred resource mix or rate structure, including possibly from multiple competitive retail suppliers.
The authors find that South Carolina ratepayers stand to gain substantial benefits from a measured introduction of enhanced regional coordination and market reforms in all three of the above categories. These benefits can be achieved through incremental reforms that follow best practices in the sequencing and introduction of various reforms.
The report was prepared by a Brattle team that included Principals John Tsoukalis, Dr. Kathleen Spees, and Johannes Pfeifenberger; Senior Consultant Andrew Levitt; Research Associates Dr. Andrew W. Thompson and Oleksandr (Sasha) Kuzura; Senior Research Analysts Evan Bennett and Megan Diehl; Research Analysts Son Phan and Ellery Curtis; Electricity Specialist Sylvia Tang; and former Senior Research Analyst Ryan Nelson.
The full report, “Assessment of Potential Market Reforms for South Carolina’s Electricity Sector,” and a summary presentation of the recommendations can be found below.