On September 11, 2026, the Northwest & Intermountain Power Producers Coalition (NIPPC), the Independent Energy Producers Association (IEP), and the Solar Energy Industries Association (SEIA) published Supporting Competition in Utility Energy Procurement Processes: Shedding Light on Systemic Problems and Market Solutions in the West, which addresses the pervasive structural conflict of interest known as utility-ownership bias. The paper explains that, under traditional cost-of-service regulation, an investor-owned utility’s (IOU) profits are tied directly to its rate base growth via capital expenditures. Consequently, IOUs are heavily incentivized to build and own their own generation and storage infrastructure rather than purchasing power from Independent Power Producers (IPPs) via Power Purchase Agreements (PPAs), which are passed through to consumers without any profit markup in most states. This systemic bias distorts wholesale energy procurement across eleven Western states, excluding California, frequently overcharging ratepayers and stifling market competition.
The paper categorizes anti-competitive utility behaviors into several systemic practices, starting with the avoidance of formal Requests for Proposals (RFPs) through one-off bilateral deals or mid-stream “urgent reliability” plan modifications. When public RFPs are issued, utilities utilize significant informational advantages, such as failing to structurally separate their internal self-build bid teams from their RFP evaluation teams and leveraging proprietary third-party developer data. Furthermore, solicitations are often engineered with structural deal-breaking provisions including rigid contract penalties, compressed commercial operation timelines that only pre-planned utility projects can meet, and the withholding of ratepayer-funded transmission rights from independent bidders.
During the bid evaluation phase, utilities routinely utilize uneven scoring metrics to favor their own projects. They contrast their loose, adjustable cost-plus self-build estimates, which frequently suffer from post-procurement cost overruns borne by ratepayers, against strict, fixed-price IPP bids. This preference is amplified through the manipulation of obfuscated portfolio models, the application of arbitrary imputed debt scoring penalties onto PPAs, and the use of speculative generic fill cost assumptions that artificially devalue shorter-term third-party contracts. To counter these distortions, the paper outlines immediate regulatory remedies, such as empowering Independent Evaluators (IEs) accountable only to state commissions, standardizing transparent term normalization methods, and allowing IPPs to utilize shared ratepayer assets like surplus interconnection capacity.
The paper includes a comprehensive list breaking down the utility generation ownership percentages resulting from IOU RFPs in eleven Western states from the last 18 years and concludes by providing additional examples and specific citations to state laws and utility commission dockets that illustrate examples of utility practices detailed in the paper.
Sanger Greene (Irion Sanger and Ellie Hardwick) assisted the Northwest & Intermountain Power Producers Coalition in drafting the paper.
The Northwest & Intermountain Power Producers Coalition represents electricity market participants in the Pacific Northwest, including independent power producers, electricity service suppliers, and transmission companies. NIPPC is committed to facilitating cost-effective electricity sales, offering consumers choices in their energy supply, and advancing fair, competitive power markets.