Competition in the Electric Industry Emerging Issues, Opportunities, and Risks for Facility Operators (1996) / Chapter Skim
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Executive Summary
Executive Summary
Pages 1-5
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Factors cited as contributing to the moves toward competition include technology advances leading to lower generating costs; a more competitive global market; the failure of regulation to produce uniform and reasonable electric power rates across the United States (currently, rates range from 14 cents per kilowatt hour on Long Island to 4 cents per kilowatt hour in the Pacific Northwest) ; and pressure on legislative bodies from consumers and industries to provide relief from high electric power costs, which have been cited as a factor in corporate decisions to relocate factories and jobs from high cost to lower cost areas.
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(The Energy Policy Act specifically forbids FERC from ordering retail wheeling.) In April 1996, the Federal Energy Regulatory Commission issued Orders 888 and 889 requiring all public utilities to file tariffs providing nondiscriminatory access to all wholesale users for a defined set of transmission services, by July 1996; adopted comparability standards and functional unbundling to help guard against discrimination; announced procedures for sharing information; and established a schedule for implementation, among other actions.
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From page 3... ...
To date, the states appear to be moving forward on varying schedules with varying proposals for retail wheeling. How, or if, the two levels of government will work together as joint regulators to make the industry more efficient overall is an issue which remains to be resolved.
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From page 4... ...
Special purpose programs. In a traditional regulated environment, state utility commissions often required utility companies to provide special purpose programs, such as research and development, demand-side management, rate assistance to {ow-income households, energy efficiency audits, renewable energy, and the like.
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From page 5... ...
It was also noted that significant cost savings can be realized through existing energy management programs, separate and apart from electric competition. Lastly, concern was expressed that the agencies not lose sight of their primary objectives of providing mission support, quality of life, and a productive working environment in the effort to reduce electric power costs.
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