California’s new feed-in tariff (FIT) is creating a burgeoning market for green energy investments, but the policy has sparked a fierce battle over state authority to dictate wholesale power...
policy that requires competition for wholesale transactions. A competitive bidding process would ensure that the utility serving the retail load always purchases the lowest-cost power that meets the policy requirements for reliability, fuel diversity, and environmental compliance.
Retail wheeling will only benefit those same NUGs that reaped windfalls from PURPA, along with those few large-load, high-load-factor industrials able to cut special deals. Such action could never be construed as proper regulatory policy.
In the few states swayed by the siren's song into considering retail wheeling, most can now see the shoals beneath the shallow arguments and are reconsidering. Those responsible for protecting the public interest are weighing the policy's significant and widespread risks against the narrow set of potential beneficiaries. Retail wheeling is neither inevitable nor good public policy.
Houston Lighting & Power Co.
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