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Fortnightly Magazine - April 15 1996

auction off their purchased-power obligations instead of their generation assets, the HHI would fall to 1,600, also sufficiently eliminating market power.

Over the next several years, as regulators and policymakers resolve uncertainty regarding transmission pricing and restructuring, focus may turn toward transmission and the investment decisions needed to open fully the electric grid. The size of the market created will be important: A larger market will help relieve fears of market power. In the case of California, market power could be diminished in the future by relieving constraints on the transmission paths into the state. t

Christopher D. Seiple and Douglas M. Logan are senior consultants at Resource Data International, Inc., an energy industry consulting and information management firm specializing in market and competitor analysis.


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