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Burnertip and Beyond

Fortnightly Magazine - September 15 1995

than by utilities. Any theoretical efficiency gain involves major issues that stem from consumers buying from multiple suppliers out of a commingled gas stream. A supplier might be able to offer lower prices from greater efficiency, or from reduced reliability during periods of extreme demand. If emergency conditions developed due to unreliable suppliers or inadequate upstream capacity, it is unlikely that utilities and regulators would be absolved from responsibility.

Any potential efficiency gains must be weighed against the long-term reliability risks. These risks are substantial because competing suppliers to firm customers would have the incentive to be short on capacity and thereby raise margins.

Finally, without real efficiency gains, the residential customer is likely to see costs increase as marketers take higher load factor customers out of retail service. For all these reasons, PECO Energy is cautious about aggressive restructuring proposals. t

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