Two obstacles must be overcome to achieve true competitive markets: reversal of the long-term underinvestment in transmission, and greater clarity in the legal and regulatory environments. How can...
new world" of competition and lower rates will not be more efficient and economical for the consumer. Instead, it will be an era of expensive and inefficient power failures and blackouts. Any of the major restructuring proposals can lead to a system as reliable as today's, but only if we all:
s Recognize that reliable system performance is in everyone's best interest.
s Keep reliability criteria strong. There's no such thing as making the system a "little" less reliable.
s Accept that markets will not take care of reliability, and that different customers will not be able to pay different rates to assure whatever level of reliability each requires. This may work to some extent for the 10 percent of reliability that involves generating capacity, but not for the 90 percent that involves bulk-power transmission. When a cascading outage occurs and a chunk of the system goes black, the whole system goes black. There's no way a few customers can be kept on line when the system around them goes down.
s Remember that we are dealing with the laws of physics. Whatever economists may wish, the
government may legislate, or FERC may mandate, Kirchhoff's Laws are not going to change. The laws of nature permit us to generate, transmit, and use electricity, but they also limit the ways in which we do so.
s Recognize that an ac electric power system is not a gas pipeline, telephone system, airline, or trucking company.
s Encourage coordination and cooperation (em even if this involves some sacrifice in the goal of "competition."
s Allow power pools, RTGs, and regional reliability councils (em all with the appropriate players. Different forms and institutions will be appropriate in different parts of the country.
s Make reliability the Number One priority (em above price, efficiency, even competition and the marketplace. Competition and an efficient market can only exist if the electric supply is predictably secure and available.
s Accept that regulations and contracts must be made to accommodate the laws of physics. t
George Loehr has a BS in electrical engineering and an MA in English literature. Mr. Loehr was employed by the New York Power Authority as chief planning engineer from 1969 to 1972, during which time he developed the utility's first inhouse system planning organization and served on many New York Power Pool and NPCC studies. In 1972, he joined the staff of the NPCC as engineering manager. He has served on numerous regional and interregional committees and task forces, and has been active in North American Electric Reliability Council affairs. In 1989 he was named executive director of NPCC.
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